The Unemployment Benefit System: a Redistributive or an Insurance Institution?

Daniel Cardona and Fernando Sánchez-Losada

No 8, DEA Working Papers from Universitat de les Illes Balears, Departament d'Economía Aplicada

Abstract: We analyze the effects of the unemployment benefit system on the economy. In particular, we focus on both the tax structure and the unemployment benefits composition. We show that if the unemployment benefit system is only paid by firms, then employment and production are maximized. Moreover, the way the government contemplates the unemployment benefit system, either as a redistributive or as an insurance institution, is crucial for the dynamics and the equilibria of the economy.

Keywords: unemployment benefit system; payroll tax; wage tax. (search for similar items in EconPapers)
JEL-codes: E24 E62 H53 J50 J65 (search for similar items in EconPapers)
Date: 2004-12
New Economics Papers: this item is included in nep-ias, nep-lab, nep-mac and nep-pbe
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Related works:
Working Paper: The Unemployment Benefit System: a Redistributive or an Insurance Institution? (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ubi:deawps:8

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