Building Blocks in the Economics of Mandates

John Addison, C. R. Barrett and W. S. Siebert
Additional contact information
C. R. Barrett: University of Birmingham
W. S. Siebert: University of Birmingham (UK) and IZA (Germany)

No 2005-16, GEMF Working Papers from GEMF, Faculty of Economics, University of Coimbra

Abstract: The paper constructs an asymmetric information model to investigate the efficiency and equity cases for government mandated benefits. A mandate can improve workers' insurance, and may also redistribute in favour of more "deserving" workers. The risk is that it may also reduce output. The more diverse are free market contracts – separating the various worker types – the more likely it is that such output effects will on balance serve to reduce welfare. It is shown that adverse effects can be reduced by restricting mandates to larger firms. An alternative to a mandate is direct government provision. We demonstrate that direct government provision has the advantage over mandates of preserving separations.

Keywords: asymmetric information; labour mandates; compensation packages (search for similar items in EconPapers)
JEL-codes: D82 J33 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2005
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Published in Portuguese Economic Journal, 5(2): 69-87, 2006.

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Related works:
Journal Article: Building blocks in the economics of mandates (2006)
Working Paper: Building Blocks in the Economics of Mandates (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:gmf:wpaper:2005-16

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