Can varying social insurance contributions improve labour market efficiency ?
No 1992006, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)
This paper, prepared for an lEA Conference in honour of James Meade on The Economics of Partnership, analyses the rationale and prospects for using cyclical variations in Social Insurance Contributions (SIC) as a means to reconcile wage flexibility with efficient risk-sharing between capital and labour. The idea of cyclical variations in SIC was introduced by Meade in 1938 with the objective of reconciling wage flexibility with stability of aggregate demand. The emphasis here is placed instead on the (complementary) risk-sharing aspect. A minimal theoretical model of a productive economy with a stock market is used to characterise wages compatible with efficient risk-sharing. Transfers corresponding to the difference between these risk-sharing wages and competitive wages have zero present value on capital markets and could be implemented in alternative ways, the practical merits of which are discussed. A specific proposal is singled out for consideration. The paper also contains a brief discussion of another approach, namely the collection of SIC as profit shares a la Weitzman.
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 404 Not Found
Working Paper: Can varying social insurance contributions improve labour market efficiency? (1993)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1992006
Access Statistics for this paper
More papers in CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Alain GILLIS ().