Staying on the Dole

TY - UNPB

T1 - Staying on the Dole

AU - Strulik, Holger

AU - Tyran, Jean-Robert

AU - Vanini, Paolo

N1 - JEL Classification: J64, J31, J38

PY - 2006

Y1 - 2006

N2 - We develop a simple model of short- and long-term unemployment to study how labor market institutions interact with labor market conditions and personal characteristics of the unemployed. We analyze how the decision to exit unemployment and to mitigate human capital degradation by retraining depends on education, skill degradation, age, labor market tightness, taxes, unemployment insurance benefits and welfare assistance. We extend our analysis by allowing for time-inconsistent choices and demonstrate the possibility of an unemployment trap

AB - We develop a simple model of short- and long-term unemployment to study how labor market institutions interact with labor market conditions and personal characteristics of the unemployed. We analyze how the decision to exit unemployment and to mitigate human capital degradation by retraining depends on education, skill degradation, age, labor market tightness, taxes, unemployment insurance benefits and welfare assistance. We extend our analysis by allowing for time-inconsistent choices and demonstrate the possibility of an unemployment trap

KW - Faculty of Social Sciences

KW - unemployment

KW - skill degradation

KW - unemployment benefits

KW - present-biased preferences

KW - retraining

M3 - Working paper

BT - Staying on the Dole

PB - Department of Economics, University of Copenhagen

CY - Cph.

ER -