An Unemployment Re-Insurance Scheme for the Eurozone? Stabilizing and Redistributive Effects
Mathias Dolls ()
No 8219, CESifo Working Paper Series from CESifo
This paper develops a decomposition framework to study the importance of diﬀerent stabilization channels of an unemployment re-insurance scheme for the euro area. Running counterfactual simulations based on household micro data for the period 2000–16, the paper ﬁnds that the re-insurance would have cushioned on average 12% (8%) of income losses through interregional (intertemporal) smoothing. These results suggest that the smoothing eﬀect of the re-insurance which is due to asymmetries in labor market shocks would have raised the income insurance of a typical unemployment insurance scheme in the euro area by more than 50%. The simulated re-insurance scheme would have been revenue-neutral at EA-19, but not at the member-state level. Average annual net contributions would have amounted to -0.1–0.1 per cent of GDP. The paper discusses how diﬀerent variants of the re-insurance might aﬀect the risk of moral hazard.
Keywords: European fiscal integration; unemployment re-insurance; automatic stabilizers; euro area reform (search for similar items in EconPapers)
JEL-codes: F55 H23 J65 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp, nep-eec, nep-ias, nep-lab and nep-ore
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Working Paper: An Unemployment Re-Insurance Scheme for the Eurozone? Stabilizing and Redistributive Effects (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8219
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