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On the design of labor market programs as stabilization policies

Abstract : This paper analyzes the optimal cyclical behavior of labor market policies in an economy with asset and labor market frictions. The policies of interest include unemployment insurance (UI) and employment protection (EP). In addition to their supply-side effects, labor market policies affect the aggregate demand via earning risk and redistribution channels. Under bilateral wage bargaining, I find that procyclical UI and countercyclical EP deliver superior welfare outcomes through stabilization via both supply and demand channels.
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Preprints, Working Papers, ...
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https://halshs.archives-ouvertes.fr/halshs-03243698
Contributor : Caroline Bauer <>
Submitted on : Monday, May 31, 2021 - 5:14:42 PM
Last modification on : Monday, June 7, 2021 - 2:47:59 PM

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  • HAL Id : halshs-03243698, version 1

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Euiyoung Jung. On the design of labor market programs as stabilization policies. 2021. ⟨halshs-03243698⟩

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