On the design of a European unemployment insurance system

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• dc.contributor.author Ábrahám, Árpád
• dc.contributor.author Brogueira de Sousa, João
• dc.contributor.author Marimon, Ramon
• dc.contributor.author Mayr, Lukas
• dc.date.accessioned 2023-06-30T06:47:43Z
• dc.date.available 2023-06-30T06:47:43Z
• dc.date.issued 2023
• dc.description.abstract We study the welfare effects of both existing and counter-factual European unemployment insurance (UI) policies using a rich multi-country dynamic general equilibrium model with labour market frictions. The model successfully replicates several salient features of European labour markets, in particular the cross-country differences in the flows between employment, unemployment and inactivity, as a result of labour market and UI policy differences across euro area countries. We find that mechanisms like the recently introduced instrument for temporary support to mitigate unemployment risks in an emergency (SURE), which allows national governments to borrow at low interest rates to cover expenditures on unemployment risk, yield sizeable welfare gains. Furthermore, we find that, in spite of the calibrated heterogeneity across euro area countries, there is a common direction in which they can improve their UI policies; in particular, a harmonized benefit system that features a one-time payment of around three quarters of income upon separation is welfare improving in all euro area countries relative to the status quo.
• dc.description.sponsorship Most of the research leading to this paper has been conducted within the Horizon 2020 ADEMU project, ‘‘A Dynamic Economic and Monetary Union’’, funded by the European Union’s Horizon 2020 Program under grant agreement No 649396. BSE is supported by the Severo Ochoa Programme for Centres of Excellence in R&D (CEX2019-000915-S). João Brogueira de Sousa gratefully acknowledges funding from Fundação para a Ciência e a Tecnologia, Portugal (UIDB/00124/2020, UIDP/00124/2020 and Social Sciences DataLab - PINFRA/22209/2016), POR Lisboa and POR Norte (Social Sciences DataLab, PINFRA/22209/2016).
• dc.format.mimetype application/pdf
• dc.identifier.citation Ábrahám Á, Brogueira de Sousa J, Marimon R, Mayr L. On the design of a European unemployment insurance system. Eur Econ Rev. 2023;156:104469. DOI: 10.1016/j.euroecorev.2023.104469
• dc.identifier.doi http://dx.doi.org/10.1016/j.euroecorev.2023.104469
• dc.identifier.issn 0014-2921
• dc.identifier.uri http://hdl.handle.net/10230/57422
• dc.language.iso eng
• dc.publisher Elsevier
• dc.relation.ispartof European Economic Review. 2023;156:104469.
• dc.relation.projectID info:eu-repo/grantAgreement/EC/H2020/649396
• dc.relation.projectID info:eu-repo/grantAgreement/ES/2PE/CEX2019-000915-S
• dc.rights © 2023 The Author(s). This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/4.0/
• dc.subject.keyword Labour markets
• dc.subject.keyword Unemployment insurance
• dc.subject.keyword Job creation
• dc.subject.keyword Job destruction
• dc.subject.keyword Risk-sharing
• dc.title On the design of a European unemployment insurance system
• dc.type info:eu-repo/semantics/article
• dc.type.version info:eu-repo/semantics/publishedVersion