Integration of Unemployment Insurance with Retirement Insurance

Joseph Stiglitz and Jungyoll Yun

No 9199, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper analyzes a social insurance system that integrates unemployment insurance with a pension program through an individual account, allowing workers to borrow against their future wage income to finance consumption during an unemployment episode and thus improving their search incentives while reducing risks. This paper identifies factors which determine the optimal degree of integration. A fully integrated system is one in which no reliance is placed at all on a separate tax-funded unemployment insurance program. We show that when the duration of unemployment is very short compared to the period of employment or retirement, the optimal system involves an exclusive reliance on pension-funded self-insurance. This system imposes a negligible risk burden for workers while avoiding attenuating search incentives. We also argue that a joint integration of several social insurance programs with a pension program through an individual account is desirable unless the risks are perfectly correlated to each other.

Date: 2002-09
New Economics Papers: this item is included in nep-ias, nep-lab and nep-ltv
Note: LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Published as Stiglitz, Joseph E. and Jungyoll Yun. "Integration Of Unemployment Insurance With Retirement Insurance," Journal of Public Economics, 2005, v89(11-12,Dec), 2037-2067.

Downloads: (external link)
http://www.nber.org/papers/w9199.pdf (application/pdf)

Related works:
Journal Article: Integration of unemployment insurance with retirement insurance (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:9199

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w9199

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().