Pareto-Improving Unemployment Policies

Jörg Lingens and Klaus Wälde

FinanzArchiv: Public Finance Analysis, 2009, vol. 65, issue 2, 220-245

Abstract: We investigate how continental European unemployment can be reduced without reducing unemployment benefits and without reducing the net income of low-wage earners. Lower unemployment replacement rates reduce unemployment, the net wage, and unemployment benefits. A lower tax on labor increases net wages and unemployment benefits. Combining these two policies allows one to reduce unemployment without reducing the net income of workers or of the unemployed. Such a policy becomes self-financing under realistic parameter constellations when taxes are reduced only for low-income workers.

Keywords: income level; unemployment; taxation; policy reform (search for similar items in EconPapers)
JEL-codes: E60 H23 J38 J51 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Pareto-Improving Unemployment Policies (2007)
Working Paper: Pareto-Improving Unemployment Policies (2006)
Working Paper: Pareto-Improving Unemployment Policies (2005)
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DOI: 10.1628/001522109X466536

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