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Regional unemployment insurance

Helge Sanner

University of Potsdam

February 19, 2001




Abstract:

This study examines the effects of regionalising the budget of unemployment insurance (UI) on wages, employment, and on UI parameters, which, for their part, determine the agents´ preferences concerning such a reform. A numerical example shows that, under reasonable assumptions, the intuition that the reform would enhance efficiency and improve the economic situation of agents from the low-unemployment region to the disadvantage of agents from the high-unemployment region is not valid in general.

Keywords: Unemployment insurance; Wage bargaining; Migration

JEL classification: J65; C78; H72

Address of the author:
University of Potsdam, Department of Economics and Social Science, Postfach 900327, D-14439 Potsdam. Tel: +49 331 977-4636, Fax: +49 331 977-4615
e-mail: sanner@rz.uni-potsdam.de





Helge Sanner: Regional Unemployment Insurance, Potsdam 2001