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Pension Benefits, Labour Market Institutions, and Unemployment
Author(s) -
Adam Antonis
Publication year - 2007
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/j.1467-9914.2007.00381.x
Subject(s) - generosity , economics , unemployment , pension , labour economics , social security , argument (complex analysis) , wage , work (physics) , macroeconomics , market economy , political science , mechanical engineering , biochemistry , chemistry , finance , law , engineering
. As argued by Summers et al . ( Quarterly Journal of Economics 1993; 108: 385–411) and Cigno (‘Is There a Social Security Tax Wedge?’, CESifo Working Paper No. 1772, 2006) public old‐age pension benefits may work as a wage‐moderating device, thereby lessening the distorting effects of labour taxation on unemployment. An implication of this argument is that there should be a negative relationship between the generosity of the pension system and the unemployment rate, for those countries where there is a strong link between individual contributions to the pension system and benefits, i.e. countries with Bismarckian pension systems. We test this hypothesis using a panel of 20 OECD countries for the time period of 1960–2004. The paper also provides evidence on the unemployment effects of various labour market institutions.