Ábrahám, Árpád and de Sousa, João Brogueira and Marimon, Ramon and Mayr, Lukas (2023) On the design of a European Unemployment Insurance System. European Economic Review, 156. p. 104469. DOI https://doi.org/10.1016/j.euroecorev.2023.104469
Ábrahám, Árpád and de Sousa, João Brogueira and Marimon, Ramon and Mayr, Lukas (2023) On the design of a European Unemployment Insurance System. European Economic Review, 156. p. 104469. DOI https://doi.org/10.1016/j.euroecorev.2023.104469
Ábrahám, Árpád and de Sousa, João Brogueira and Marimon, Ramon and Mayr, Lukas (2023) On the design of a European Unemployment Insurance System. European Economic Review, 156. p. 104469. DOI https://doi.org/10.1016/j.euroecorev.2023.104469
Abstract
We study the welfare effects of both existing and counter-factual European unemployment insurance (UI) policies using a rich multi-country dynamic general equilibrium model with labour market frictions. The model successfully replicates several salient features of European labour markets, in particular the cross-country differences in the flows between employment, unemployment and inactivity, as a result of labour market and UI policy differences across euro area countries. We find that mechanisms like the recently introduced instrument for temporary support to mitigate unemployment risks in an emergency (SURE), which allows national governments to borrow at low interest rates to cover expenditures on unemployment risk, yield sizeable welfare gains. Furthermore, we find that, in spite of the calibrated heterogeneity across euro area countries, there is a common direction in which they can improve their UI policies; in particular, a harmonized benefit system that features a one-time payment of around three quarters of income upon separation is welfare improving in all euro area countries relative to the status quo.
Item Type: | Article |
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Uncontrolled Keywords: | Job creation; Job destruction; Labour markets; Risk-sharing; Unemployment insurance |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 28 Jun 2023 13:49 |
Last Modified: | 16 May 2024 21:51 |
URI: | http://repository.essex.ac.uk/id/eprint/35642 |
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