Labour Market Programmes and the Equity-Efficiency Trade-Off

Trine Filges, John Kennes, Birthe Larsen, Torben Tranæs

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

Resumé

This paper studies optimal labour market policy in a society where differently gifted individuals can invest in training to further increase their labour market productivity and where the government seeks both efficiency and equity. Frictions in the matching process create unemployment and differently skilled workers face different levels of risk of unemployment. We show that in such an environment, training programmes that are targeted at the disadvantaged workers complement passive transfers (UI benefits), unlike general training subsidies. Combining passive subsidies with a training subsidy conditioned on the individual being unemployed (for a period) – the typical Active Labour Market Programme – creates a favourable trade-off between equity and efficiency and this encourages high spending on training
OriginalsprogEngelsk
TidsskriftJournal of Macroeconomics
Vol/bind33
Udgave nummer4
Sider (fra-til)738-753
ISSN0164-0704
DOI
StatusUdgivet - 2011

Citer dette

Filges, Trine ; Kennes, John ; Larsen, Birthe ; Tranæs, Torben. / Labour Market Programmes and the Equity-Efficiency Trade-Off. I: Journal of Macroeconomics. 2011 ; Bind 33, Nr. 4. s. 738-753.
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Labour Market Programmes and the Equity-Efficiency Trade-Off. / Filges, Trine; Kennes, John; Larsen, Birthe; Tranæs, Torben.

I: Journal of Macroeconomics, Bind 33, Nr. 4, 2011, s. 738-753.

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

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