To Have and to Hold: A Dynamic Cost-Benefit Analysis of Temporary Unemployment Measures

Kuno Huisman and Jacco J.J. Thijssen

Discussion Papers from Department of Economics, University of York

Abstract: This paper analyses the temporary unemployment regulations that several governments of European countries have introduced during the recent recession. We view these measures as a collection of real options that governments provide to firms and value these options. We study, in particular, the effect of such measures on the liquidation decision of the firm. In addition, we study the effect of government limitations on the duration of the programme. We find that temporary unemployment measures delay a firm’s liquidation. However, since the costs of the programme are incurred before the benefits, the discounted benefit-to-cost ratio does not necessarily indicate the programme is good for welfare.

Keywords: Temporary unemployment; Real options; Dynamic cost-benefit analysis (search for similar items in EconPapers)
JEL-codes: G33 G38 H53 (search for similar items in EconPapers)
Date: 2013-06
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.york.ac.uk/media/economics/documents/discussionpapers/2013/1310.pdf Main text (application/pdf)

Related works:
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:yor:yorken:13/10

Access Statistics for this paper

More papers in Discussion Papers from Department of Economics, University of York Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom. Contact information at EDIRC.
Bibliographic data for series maintained by Paul Hodgson ().