Unemployment Benefits: Disincentives to Work?
DOI:
https://doi.org/10.62343/cjss.2013.120Keywords:
Economic Incentives, Welfare Systems, Benefit Structure, Unemployment Traps, Social ProtectionAbstract
The aim of this paper is to analyze the effect that unemployment
benefits – an instrument of social policy – have on incentives to
work. It will start by discussing arguments that portray unemployment
benefits as disincentives. It will continue by analyzing
more profoundly how benefits can serve as an instrument to increase
employment and mitigate disincentives to work. Finally, it
will be shown that when taking into consideration the heterogeneity
of elements shaping the unemployment benefit system and
structure, substantial replacement rates may contribute to increasing
efficiency of labor market.
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