2024-03-28T18:41:05Zhttps://uvadoc.uva.es/oai/requestoai:uvadoc.uva.es:10324/586392023-02-13T20:00:30Zcom_10324_1160com_10324_931com_10324_894col_10324_1314
Beyond the added-worker and the discouraged-worker effects: the entitled-worker effect
Martín Román, Ángel Luis
Labour force participation
Business cycle
Unemployment
Added-worker effect
Discouraged-worker effect
Unemployment benefit
53 Ciencias Económicas
Producción Científica
This paper identifies and analyses a new effect related to the cyclical behaviour of labour supply: the Entitled-Worker Effect (EWE). This effect is different from the well-known Added-Worker Effect (AWE) and Discouraged-Worker Effect (DWE). The EWE is a consequence of one of the most important labour institutions: the unemployment benefit (UB). We develop a model with uncertainty about the results of the job-seeking and transaction costs linked to such a search process, showing that a kind of moral hazard appears. This creates new incentives for workers and produces an additional counter-cyclical pressure on aggregate labour supply, but with a different foundation from that of the AWE. We present empirical evidence supporting the EWE for the Spanish case. As a forward-looking conclusion, policymakers should rethink their political actions in the future as unemployment might be overstated, particularly in those countries with generous UB systems.
Ministerio de Ciencia e Innovación (projects ECO 2017-82227-P and PID2020-112509GB-I00)
2023-02-13T12:42:39Z
2023-02-13T12:42:39Z
2022
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Economic Modelling, 2022, vol, 110, p. 105812
0264-9993
https://uvadoc.uva.es/handle/10324/58639
10.1016/j.econmod.2022.105812
105812
Economic Modelling
110
eng
https://www.sciencedirect.com/science/article/pii/S026499932200058X
Attribution-NonCommercial-NoDerivatives 4.0 Internacional
info:eu-repo/semantics/openAccess
http://creativecommons.org/licenses/by-nc-nd/4.0/
© 2022 The Author(s)
application/pdf
Elsevier
https://uvadoc.uva.es/bitstream/10324/58639/4/Beyond-added-worker-discouraged-worker-effects.pdf.jpg
Hispana
TEXT
http://creativecommons.org/licenses/by-nc-nd/4.0/
UVaDOC. Repositorio Documental de la Universidad de Valladolid
https://uvadoc.uva.es/handle/10324/58639