EconPapers    
Economics at your fingertips  
 

Welfare Effects of Short-Time Compensation

Helge Braun () and Björn Brügemann ()
Additional contact information
Helge Braun: Ruhr Graduate School in Economics, Germany
Björn Brügemann: VU Amsterdam, The Netherlands

Authors registered in the RePEc Author Service: Bjoern A. Bruegemann ()

No 17-010/VI, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We study welfare effects of public short-time compensation (STC) in a model in which firms respond to idiosyncratic profitability shocks by adjusting employment and hours per worker. Introducing STC substantially improves welfare by mitigating distortions caused by public unemployment insurance (UI), but only if firms have access to private insurance. Otherwise firms respond to low profitability by combining layoffs with long hours for remaining workers, rather than by taking up STC. Optimal STC is substantially less generous than UI even when firms have access to private insurance, and equally generous STC is worse than not offering STC at all.

Keywords: Short-Time Compensation; Unemployment Insurance; Welfare (search for similar items in EconPapers)
JEL-codes: J65 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ias and nep-lab
Date: 2017-01-16
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
https://papers.tinbergen.nl/17010.pdf (application/pdf)

Related works:
Working Paper: Welfare Effects of Short-Time Compensation (2014) Downloads
Working Paper: Welfare Effects of Short-Time Compensation (2014) Downloads
Working Paper: Welfare Effects of Short-Time Compensation (2014) Downloads
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:tin:wpaper:20170010

Access Statistics for this paper

More papers in Tinbergen Institute Discussion Papers from Tinbergen Institute Contact information at EDIRC.
Bibliographic data for series maintained by Tinbergen Office +31 (0)10-4088900 ().

 
Page updated 2019-10-08
Handle: RePEc:tin:wpaper:20170010