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Measuring the equilibrium effects of unemployment benefits dispersion
Author(s) -
Vuuren Aico Van,
Van Den Berg Gerard J.,
Ridder Geert
Publication year - 2000
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.581
Subject(s) - unemployment , economics , wage dispersion , dispersion (optics) , aggregate (composite) , productivity , econometrics , estimation , labour economics , general equilibrium theory , efficiency wage , macroeconomics , physics , materials science , management , composite material , optics
We analyse the impact of unemployment benefits and minimum wages using an equilibrium search model which allows for dispersion of benefits and productivity levels, job‐to‐job transitions, and structural and frictional unemployment. The estimation method uses readily available aggregate data on marginal distributions of unemployment durations as well as wages and benefit levels. Different causes of structural and frictional unemployment are investigated. We investigate the efficiency of the imposition of a single benefit level for all household types and the introduction of a tax credit on earned income. Copyright © 2000 John Wiley & Sons, Ltd.