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oai: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