Economics at your fingertips  

Why Unemployment Insurance Might Not Only Be Good for the Soul, It Might Also Be Good for the Economy

Morris Altman ()

Review of Social Economy, 2004, vol. 62, issue 4, 517-541

Abstract: Contrary to the conventional view that unemployment insurance serves to directly increase the rate of unemployment as well as reducing an economy's competitiveness by increasing the market wage of labor, the argument presented in this paper is that this worldview critically depends on unrealistic behavioral assumptions. A more realistic modeling suggests that unemployment rates need not rise and competitiveness need not deteriorate with the introduction of or improvements in unemployment insurance, which can also induce increases in economic efficiency. These analytical predictions are consistent with the empirics of unemployment insurance. Unemployment insurance can therefore protect the unemployed without damaging the economy.

Keywords: unemployment insurance; x-efficiency; competition; bargaining power; wellbeing (search for similar items in EconPapers)
Date: 2004
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link) (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

DOI: 10.1080/0034676042000296245

Access Statistics for this article

Review of Social Economy is currently edited by Wilfred Dolfsma and John Davis

More articles in Review of Social Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

Page updated 2021-08-05
Handle: RePEc:taf:rsocec:v:62:y:2004:i:4:p:517-541