Converting Unemployment Benefits into Employment Subsidies

Dennis Snower

No 930, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper explores the implications of giving unemployed people -- particularly the long-term unemployed -- the opportunity to use part of their unemployment benefits to provide employment vouchers to the firms that hire them. The vouchers would depend positively on unemployment duration and training. The paper argues that this policy would give unemployed people and their potential employers an expanded domain of choices in the labour market and thereby reduce the market failures generated and amplified by unemployment benefit systems. A simple theoretical model is presented, followed by preliminary empirical estimates which suggest that the proposed policy may have significant potential in a number of OECD countries.

Keywords: Employment Subsidies; Unemployment; Unemployment Benefit Systems (search for similar items in EconPapers)
JEL-codes: J23 J24 J31 J32 J64 (search for similar items in EconPapers)
Date: 1994-05
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Citations: View citations in EconPapers (77)

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Journal Article: Converting Unemployment Benefits into Employment Subsidies (1994)
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