Are early educational choices affected by unemployment benefits? [electronic resource] : new theory / Paul Frijters and Micheal A. Shields
- Bib ID:
- 6100706
- Format:
- Book
- Author:
- Frijters, Paul
- Online Access:
- Archived at ANL
- Related Online Resources:
- Publisher's site
- Description:
- Brisbane, Qld. : School of Economics, University of Queensland, 2010
- Series:
-
- Discussion paper (University of Queensland. School of Economics : Online) ; 447. 1833-1068
- PANDORA electronic collection.
- Technical Details:
-
- Mode of access: Online. Address as at 17/09/2012: http://www.uq.edu.au/economics/447-are-early-educational-choices-affected-by-unemployment-benefits-new-theory
- System requirements: Adobe Acrobat reader to read PDF file.
- Summary:
-
In this paper we contribute to the recent literature that has investigated the potential economic advantages of unemployment benefits, by developing a model where young individuals in education have to irreversibly choose a degree of specialisation positively related to future unemployment risk, market wages for different types of specialisation have to compensate risk-averse individuals for these risks. Unemployment benefits affect the incentives for specialisation and thereby the long-run composition of the workforce, the wage structure, and output. I address this issue in OLG search models with risk-aversion, talent heterogeneity, endogenous specialisation distributions, and competitive wage formation. The main results are that 1) higher unemployment benefits are related to higher mean specialisation and at low levels raise efficiency and welfare; 2) even though wages compensate for risks, unemployment risk and individual wages are generically negatively related when there is talent heterogeneity; 3) the composition of the workforce changes slowly with changing incentives, leading to long lags between welfare system changes and average outcomes (unemployment and output) and lead to longer lasting effects of shocks in regions with higher unemployment benefits.
- Notes:
-
- "September 6, 2010".
- Title from title screen (viewed on Sept. 17, 2012)
- Includes bibliographical references (p. 27-30)
- Text and graphics.
- Selected for archiving
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- Copyright:
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In Copyright
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Copyright status was determined using the following information:
- Material type:
- Literary Dramatic Musical
- Published status:
- Published
- Publication date:
- 2010
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