IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_5430.html
   My bibliography  Save this paper

Unemployment Insurance in Unionized Labor Markets: Neither Ghent nor Centralized

Author

Listed:
  • David Saha
  • Ronnie Schöb

Abstract

This paper analyzes unemployment insurance (UI) schemes in the presence of mobile workers and trade unions at industry or regional level that are capable of internalizing the effect of wage demands on UI contribution rates. We compare two types of existing UI systems. When UI is organized at trade union level (decentralized Ghent UI), trade unions strategically lower the benefit levels of their UI schemes to deter welfare recipients from other unions from entering their UI scheme, leading to a race to the bottom in UI provision. With centralized provision of UI, by contrast, trade unions do not fully account for the cost of higher wages as mobility allows them to partially shift the burden of unemployment to other UIs. A system of coordinated UI, combining a centrally set benefit level with decentralized funding as in Ghent UI systems, can circumvent both the strategic benefit setting and the fiscal externality problems, thus reconciling the equity and efficiency aims in the design of unemployment insurance.

Suggested Citation

  • David Saha & Ronnie Schöb, 2015. "Unemployment Insurance in Unionized Labor Markets: Neither Ghent nor Centralized," CESifo Working Paper Series 5430, CESifo.
    • Handle: RePEc:ces:ceswps:_5430
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp5430.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Assaf Razin & Jackline Wahba, 2015. "Welfare Magnet Hypothesis, Fiscal Burden, and Immigration Skill Selectivity," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 369-402, April.
    2. repec:bla:scandj:v:87:y:1985:i:2:p:160-93 is not listed on IDEAS
    3. Mathias Dolls & Clemens Fuest & Dirk Neumann & Andreas Peichl, 2018. "An unemployment insurance scheme for the euro area? A comparison of different alternatives using microdata," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(1), pages 273-309, February.
    4. Harry C. Katz, 1993. "The Decentralization of Collective Bargaining: A Literature Review and Comparative Analysis," ILR Review, Cornell University, ILR School, vol. 47(1), pages 3-22, October.
    5. Christoph Skupnik, 2014. "EU enlargement and the race to the bottom of welfare states," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-21, December.
    6. De Giorgi, Giacomo & Pellizzari, Michele, 2006. "Welfare Migration in Europe and the Cost of a Harmonised Social Assistance," IZA Discussion Papers 2094, Institute of Labor Economics (IZA).
    7. Dolls, Mathias & Fuest, Clemens & Neumann, Dirk & Peichl, Andreas, 2014. "An Unemployment Insurance Scheme for the Euro Area," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100572, Verein für Socialpolitik / German Economic Association.
    8. William Nickell, 2006. "The CEP-OECD Institutions Data Set (1960-2004)," CEP Discussion Papers dp0759, Centre for Economic Performance, LSE.
    9. Borjas, George J, 1999. "Immigration and Welfare Magnets," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 607-637, October.
    10. Arjan Lejour & Harrie Verbon, 1996. "Capital mobility, wage bargaining, and social insurance policies in an economic union," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 3(4), pages 495-513, October.
    11. Holmlund, Bertil & Lundborg, Per, 1999. "Wage bargaining, union membership, and the organization of unemployment insurance," Labour Economics, Elsevier, vol. 6(3), pages 397-415, September.
    12. Petri Böckerman & Roope Uusitalo, 2006. "Erosion of the Ghent System and Union Membership Decline: Lessons from Finland," British Journal of Industrial Relations, London School of Economics, vol. 44(2), pages 283-303, June.
    13. Nickell, William, 2006. "The CEP-OECD institutions data set (1960-2004)," LSE Research Online Documents on Economics 19789, London School of Economics and Political Science, LSE Library.
    14. Jan K. Brueckner, 1999. "Welfare Reform and the Race to the Bottom: Theory and Evidence," Southern Economic Journal, John Wiley & Sons, vol. 66(2), pages 505-525, January.
    Full references (including those not matched with items on IDEAS)

    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. David Saha & Ronnie Schöb, 2019. "Unemployment insurance in unionized labor markets with mobile workers: neither Ghent nor centralized," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(2), pages 305-326, May.
    2. Martin Kahanec & Martin Guzi, 2023. "Welfare Migration," Discussion Papers 65, Central European Labour Studies Institute (CELSI).
    3. Corneo, Giacomo & Neidhöfer, Guido, 2021. "Income redistribution and self-selection of immigrants," Journal of Public Economics, Elsevier, vol. 198(C).
    4. Vassil Kirov & Lucia Kováčová & Martin Guzi & Jan Czarzasty & Dragoș Adăscăliței & Martin Kahanec, 2023. "Preserving Jobs in COVID-19 Times in CEE Countries: Social Partners’ Responses and Actions," Discussion Papers 66, Central European Labour Studies Institute (CELSI).
    5. Andersen, Torben M. & Migali, Silvia, 2016. "Migrant Workers and the Welfare State," IZA Discussion Papers 9940, Institute of Labor Economics (IZA).
    6. Wido Geis & Silke Uebelmesser & Martin Werding, 2013. "How do Migrants Choose Their Destination Country? An Analysis of Institutional Determinants," Review of International Economics, Wiley Blackwell, vol. 21(5), pages 825-840, November.
    7. Sergio Destefanis & Matteo Fragetta & Giuseppe Mastromatteo & Nazzareno Ruggiero, 2020. "The Beveridge curve in the OECD before and after the great recession," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(3), pages 411-436, September.
    8. Dolls, Mathias, 2016. "Chances and risks of a European unemployment benefit scheme," ZEW policy briefs 7/2016, ZEW - Leibniz Centre for European Economic Research.
    9. Alesina, Alberto & Murard, Elie & Rapoport, Hillel, 2019. "Immigration and Preferences for Redistribution in Europe," IZA Discussion Papers 12130, Institute of Labor Economics (IZA).
    10. Berthold, Norbert & Neumann, Michael, 2006. "Europas Sozialstaaten im Schatten der Globalisierung," Discussion Paper Series 88, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    11. Tito Boeri & Juan F. Jimeno, 2015. "The unbearable divergence of unemployment in europe," Working Papers 1534, Banco de España.
    12. Kahanec, Martin & Zaiceva, Anzelika & Zimmermann, Klaus F., 2009. "Lessons from Migration after EU Enlargement," IZA Discussion Papers 4230, Institute of Labor Economics (IZA).
    13. Hebous, Shafik & Weichenrieder, Alfons J., 2015. "Towards a fiscal union? On the acceptability of a fiscal transfer system in the eurozone," SAFE White Paper Series 28, Leibniz Institute for Financial Research SAFE.
    14. Arnaud Chevalier & Benjamin Elsner & Andreas Lichter & Nico Pestel, 2018. "Immigrant Voters, Taxation and the Size of the Welfare State," SOEPpapers on Multidisciplinary Panel Data Research 994, DIW Berlin, The German Socio-Economic Panel (SOEP).
    15. Claudia Olivetti & Barbara Petrongolo, 2011. "Gender Gaps Across Countries and Skills: Supply, Demand and the Industry Structure," CEP Discussion Papers dp1093, Centre for Economic Performance, LSE.
    16. Bettin, Giulia & Sacchi, Agnese, 2020. "Health spending in Italy: The impact of immigrants," European Journal of Political Economy, Elsevier, vol. 65(C).
    17. James P. Ziliak, 2015. "Temporary Assistance for Needy Families," NBER Chapters, in: Economics of Means-Tested Transfer Programs in the United States, Volume 1, pages 303-393, National Bureau of Economic Research, Inc.
    18. Nadav Ben Zeev & Tomer Ifergane, 2022. "Firing Restrictions and Economic Resilience: Protect and Survive?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 43, pages 93-124, January.
    19. Koethenbuerger, Marko, 2014. "Competition for migrants in a federation: Tax or transfer competition?," Journal of Urban Economics, Elsevier, vol. 80(C), pages 110-118.
    20. Bas, Maria & Carluccio, Juan, 2009. "Wage bargaining and the boundaries of the multinational firm," LSE Research Online Documents on Economics 28700, London School of Economics and Political Science, LSE Library.

    More about this item

    Keywords

    unemployment insurance; Ghent system; trade unions;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

    Statistics

    Access and download statistics

    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:ces:ceswps:_5430. 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: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    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.