Social Insurance and Transition

40 Pages Posted: 4 Jul 2004 Last revised: 23 Jul 2022

See all articles by Andrew Atkeson

Andrew Atkeson

University of California, Los Angeles (UCLA) - Department of Economics; National Bureau of Economic Research (NBER)

Patrick J. Kehoe

Federal Reserve Bank of Minneapolis - Research Department; University of Minnesota - Twin Cities - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: July 1993

Abstract

We study the general equilibrium effects of social insurance on the transition in a model in which the process of moving workers from matches in the state sector to new matches in the private sector takes time and involves uncertainty. We find that adding social insurance may slow transition. When there are incentive problems in this rematching process, the optimal social insurance scheme may involve forced layoffs and involuntary unemployment.

Suggested Citation

Atkeson, Andrew G. and Kehoe, Patrick J., Social Insurance and Transition (July 1993). NBER Working Paper No. w4411, Available at SSRN: https://ssrn.com/abstract=314633

Andrew G. Atkeson (Contact Author)

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Patrick J. Kehoe

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University of Minnesota - Twin Cities - Department of Economics ( email )

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