Bismarck versus Beveridge. Flat- and earnings-related unemployment insurance in an efficiency wage framework

A higher unemployment compensation increases the incentive to shirk in efficiency wage models. If there is a stronger dependence of unemployment benefits on current earnings, these incentives will be reduced. An unemployment insurance with earnings-related benefits is thus characterised by higher employment than one with flat-rate benefits. It is investigated under which conditions this advantage persists in the longer term when financial constraints such as an ex-post constant level of benefits, a cash limit or a balanced budget rule apply, or when firms are constrained to zero profits. (orig.)SIGLEAvailable from TIB Hannover: RN 6136(291) / FIZ - Fachinformationszzentrum Karlsruhe / TIB - Technische InformationsbibliothekDEGerman