Social Preferences and Labor Market Policy

TY - UNPB

T1 - Social Preferences and Labor Market Policy

AU - Filges, Trine

AU - Kennes, John

AU - Larsen, Birthe

AU - Tranæs, Torben

PY - 2006

Y1 - 2006

N2 - We find that the main featues of labor policy across OECD countries can be explained by a simple general equilibrium search model with risk neutral agents and a government that chooses policy to maximize a social welfare function. In equilibrum, policies are chosen to optimal redistribute income from advantaged to disadvantaged workers. A worker can be disadvantaged in the sense that they may have less ability to aquire and utilize skills in the workplace. The model explains why passive benefits tend to fall and active benefits tend to increase during the course of unemployment spell. The model also explains why countries that appear to pursue equity spend more on both active and passive labor market programs.

AB - We find that the main featues of labor policy across OECD countries can be explained by a simple general equilibrium search model with risk neutral agents and a government that chooses policy to maximize a social welfare function. In equilibrum, policies are chosen to optimal redistribute income from advantaged to disadvantaged workers. A worker can be disadvantaged in the sense that they may have less ability to aquire and utilize skills in the workplace. The model explains why passive benefits tend to fall and active benefits tend to increase during the course of unemployment spell. The model also explains why countries that appear to pursue equity spend more on both active and passive labor market programs.

M3 - Working paper

T3 - Working Paper / Department of Economics. Copenhagen Business School

BT - Social Preferences and Labor Market Policy

PB - Copenhagen Business School, CBS

CY - Frederiksberg

ER -