IDEAS home Printed from https://ideas.repec.org/a/taf/rsocec/v62y2004i4p517-541.html
   My bibliography  Save this article

Why Unemployment Insurance Might Not Only Be Good for the Soul, It Might Also Be Good for the Economy

Author

Listed:
  • Morris Altman

Abstract

Contrary to the conventional view that unemployment insurance serves to directly increase the rate of unemployment as well as reducing an economy's competitiveness by increasing the market wage of labor, the argument presented in this paper is that this worldview critically depends on unrealistic behavioral assumptions. A more realistic modeling suggests that unemployment rates need not rise and competitiveness need not deteriorate with the introduction of or improvements in unemployment insurance, which can also induce increases in economic efficiency. These analytical predictions are consistent with the empirics of unemployment insurance. Unemployment insurance can therefore protect the unemployed without damaging the economy.

Suggested Citation

  • Morris Altman, 2004. "Why Unemployment Insurance Might Not Only Be Good for the Soul, It Might Also Be Good for the Economy," Review of Social Economy, Taylor & Francis Journals, vol. 62(4), pages 517-541.
    • Handle: RePEc:taf:rsocec:v:62:y:2004:i:4:p:517-541
    DOI: 10.1080/0034676042000296245
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/0034676042000296245
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/0034676042000296245?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Richard B. Freeman, 1994. "Working Under Different Rules," NBER Books, National Bureau of Economic Research, Inc, number free94-1.
    2. Kochan, Thomas A., 1996. "What works at work : overview and assessment," Working papers 3886-96., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Manuel Couret Pereira Branco & Pedro Damião de Sousa Henriques, 2009. "Human Rights as a Tool for Sustainable Development," CEFAGE-UE Working Papers 2009_11, University of Evora, CEFAGE-UE (Portugal).
    2. Bruce E. Kaufman, 2012. "Wage Theory, New Deal Labor Policy, and the Great Depression: Were Government and Unions to Blame?," ILR Review, Cornell University, ILR School, vol. 65(3), pages 501-532, July.
    3. Altman, Morris, 2014. "Insights from behavioral economics on how labor markets work," Working Paper Series 3466, Victoria University of Wellington, School of Economics and Finance.
    4. Altman, Morris, 2014. "Insights from behavioral economics on how labor markets work," Working Paper Series 18843, Victoria University of Wellington, School of Economics and Finance.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gerlach, Knut & Jirjahn, Uwe, 1998. "Technischer Fortschritt, Arbeitsorganisation und Qualifikation : eine empirische Analyse für das Verarbeitende Gewerbe Niedersachsens (Technological progress, organisation of labour, and qualification," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 31(3), pages 426-437.
    2. Gerlach, Knut & Jirjahn, Uwe, 1998. "Technischer Fortschritt, Arbeitsorganisation und Qualifikation : eine empirische Analyse für das Verarbeitende Gewerbe Niedersachsens (Technological progress, organisation of labour, and qualification," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 31(3), pages 426-437.
    3. repec:ilo:ilowps:366690 is not listed on IDEAS
    4. Richard Freeman, 1995. "Does It Fit? Drawing Lessons from Differing Labor Practices," CEP Discussion Papers dp0230, Centre for Economic Performance, LSE.
    5. Lewkowicz Jacek & Lewczuk Anna, 2017. "An Institutional Approach to Trade Union Density. The Case of Legal Origins and Political Ideology," Central European Economic Journal, Sciendo, vol. 2(49), pages 35-49, December.
    6. Cristiano Perugini & Gaetano Martino, 2008. "Income Inequality Within European Regions: Determinants And Effects On Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(3), pages 373-406, September.
    7. Adsera, Alicia & Boix, Carles, 2000. "Must we choose? European unemployment, American inequality, and the impact of education and labor market institutions," European Journal of Political Economy, Elsevier, vol. 16(4), pages 611-638, November.
    8. Thomas Kochan & Marc Weinstein, 1994. "Recent Developments in US Industrial Relations," British Journal of Industrial Relations, London School of Economics, vol. 32(4), pages 483-504, December.
    9. Eguchi, Kyota, 2004. "Trainers' dilemma of choosing between training and promotion," Labour Economics, Elsevier, vol. 11(6), pages 765-783, December.
    10. Alex Bryson & Richard Freeman, 2008. "How Does Shared Capitalism Affect Economic Performance in the UK?," NBER Working Papers 14235, National Bureau of Economic Research, Inc.
    11. Richard B.Freeman, 2003. "Labor market institutions and employment policies: the international experience," Estudios de Economia, University of Chile, Department of Economics, vol. 30(1 Year 20), pages 5-20, June.
    12. Cynthia Bansak & Steven Raphael, 2001. "Immigration Reform and the Earnings of Latino Workers: Do Employer Sanctions Cause Discrimination?," ILR Review, Cornell University, ILR School, vol. 54(2), pages 275-295, January.
    13. Schuler, Randall S., 2000. "The internationalization of human resource management," Journal of International Management, Elsevier, vol. 6(3), pages 239-260.
    14. Miguel A. Hernandez, 2019. "Unveiling International New Ventures’ Success: Employee’s Entrepreneurial Behavior," Administrative Sciences, MDPI, vol. 9(3), pages 1-32, August.
    15. Xuejun Liu & Albert Park & Yaohui Zhao, 2010. "Explaining Rising Returns to Education in Urban China in the 1990s," Trade Working Papers 22720, East Asian Bureau of Economic Research.
    16. Catalina Amuedo-Dorantes & Cynthia Bansak, 2011. "The Impact of Amnesty on Labor Market Outcomes: A Panel Study Using the Legalized Population Survey," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(3), pages 443-471, July.
    17. Douglas L. Kruse & Richard B. Freeman & Joseph R. Blasi, 2010. "Do Workers Gain by Sharing? Employee Outcomes under Employee Ownership, Profit Sharing, and Broad-Based Stock Options," NBER Chapters, in: Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options, pages 257-289, National Bureau of Economic Research, Inc.
    18. Jaime Ortega, 2001. "Job Rotation as a Learning Mechanism," Management Science, INFORMS, vol. 47(10), pages 1361-1370, October.
    19. Kenju Kamei & Thomas Markussen, 2023. "Free Riding and Workplace Democracy—Heterogeneous Task Preferences and Sorting," Management Science, INFORMS, vol. 69(7), pages 3884-3904, July.
    20. Che, Yi & Li, Xuchao & Zhang, Yan & Zhao, Lin, 2024. "Labor protection and firms’ risk-taking behavior: evidence from China’s New Labor Contract Law," Journal of Asian Economics, Elsevier, vol. 91(C).
    21. Nathalie Chusseau & Michel Dumont, 2012. "Growing Income Inequalities in Advanced," Working Papers hal-00993359, HAL.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rsocec:v:62:y:2004:i:4:p:517-541. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RRSE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.