Unemployment Benefits Versus Conditional Negative Income Taxes

Dennis Snower

No 1995/065, IMF Working Papers from International Monetary Fund

Abstract: The paper analyzes the wage-employment effects of replacing unemployment benefits by negative income taxes. It first surveys the major equity and efficiency effects of unemployment benefits versus negative income taxes, and summarizes the salient features of many European unemployment benefit systems in this light. Second, it presents a simple theoretical model that focuses on the relative wage-employment effects of unemployment benefits versus negative income taxes. Finally, it provides some empirical groundwork for assessing this relative effect

Keywords: WP; unemployment insurance; unemployment benefit system; negative income tax system; systems operative; negative income tax scheme; government budget constraint; Unemployment benefits; Personal income tax; Employment; Unemployment; Income tax systems; Western Europe; Europe (search for similar items in EconPapers)
Pages: 22
Date: 1995-07-01
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