Publikation: A positive theory of the earnings relationship of unemployment benefits
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2010
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Public Choice. 2010, 145(1-2), pp. 137-163. Available under: doi: 10.1007/s11127-009-9558-0
Zusammenfassung
In a wage bargaining model, a stronger earnings relationship of unemployment benefits may reduce wages. Therefore, the benefit structure significantly influences profits and trade union utility, raising the question as to how the benefit structure is determined in the political process. We consider a government that chooses the earnings relationship in order to maximize its political support. Our model predicts a strong earnings relationship under right-wing governments and a weak relationship when unions are influential. Using panel data for 19 OECD countries, we find support for these theoretical predictions. Moreover, we show that the earnings relationship varies negatively with openness.
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Fachgebiet (DDC)
330 Wirtschaft
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Earnings relationship, panel data, political support maximization, wage bargaining, unemployment benefits
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GOERKE, Laszlo, Markus PANNENBERG, Heinrich URSPRUNG, 2010. A positive theory of the earnings relationship of unemployment benefits. In: Public Choice. 2010, 145(1-2), pp. 137-163. Available under: doi: 10.1007/s11127-009-9558-0BibTex
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year={2010},
doi={10.1007/s11127-009-9558-0},
title={A positive theory of the earnings relationship of unemployment benefits},
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author={Goerke, Laszlo and Pannenberg, Markus and Ursprung, Heinrich}
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<dcterms:abstract xml:lang="eng">In a wage bargaining model, a stronger earnings relationship of unemployment benefits may reduce wages. Therefore, the benefit structure significantly influences profits and trade union utility, raising the question as to how the benefit structure is determined in the political process. We consider a government that chooses the earnings relationship in order to maximize its political support. Our model predicts a strong earnings relationship under right-wing governments and a weak relationship when unions are influential. Using panel data for 19 OECD countries, we find support for these theoretical predictions. Moreover, we show that the earnings relationship varies negatively with openness.</dcterms:abstract>
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