Unemployment Insurance Savings Accounts and Collective Wage Determination

Laszlo Goerke

No 3141, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Unemployment Insurance Savings Accounts (UISAs) entitle workers to unemployment benefits at the expense of future pension payments. Therefore, such accounts make unemployment less attractive, intensify job search, and raise employment. In the present paper the wage and employment consequences of UISAs are investigated in a model of collective wage determination. In the basic set-up, UISAs induce a trade union to lower wages. This effect can also arise if (1) balanced-budget repercussions are taken into account, (2) individual job search is incorporated, and (3) wage-dependent pensions are allowed for. However, the requirements for negative wage effects to arise become stricter than in the base model. Thus, collective bargaining creates additional impediments for the positive employment consequences of UISAs.

Keywords: unemployment accounts; employment; trade union; unemployment benefits; wages (search for similar items in EconPapers)
JEL-codes: J38 J51 J65 J68 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2007-11
New Economics Papers: this item is included in nep-dge, nep-ias and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published as 'The Effects of Unemployment Insurance Savings Accounts in the Presence of Collective Bargaining Contracts' in: W. Franz, H.-J. Ramser, M. Stadler (Hrsg.), Arbeitsverträge – Wirtschaftswissenschaftliches Seminar Ottobeuren, Tübingen, 2008, 37, 199-226

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