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Active Unemployment Insurance

Author

Listed:
  • Røed, Knut

    (Ragnar Frisch Centre for Economic Research)

Abstract
The paper argues that a comprehensive activation strategy is called for – in both unemployment and disability insurance – to minimize the conflict between income insurance and work incentives and to prevent the economic crisis from causing a long-lasting decline in labor force participation. A review of recent empirical evidence, particularly from the Scandinavian countries indicates that "mild" activation requirements effectively counteract moral hazard problems in social insurance. The paper also argues that the distinction between unemployment and disability is blurred, and that both temporary and permanent disability insurance programs should be designed to encourage and support the use of remaining (partial) work capacity.

Suggested Citation

  • Røed, Knut, 2012. "Active Unemployment Insurance," IZA Policy Papers 41, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izapps:pp41
    as

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    File URL: https://docs.iza.org/pp41.pdf
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    References listed on IDEAS

    as
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    27. Johannes F. Schmieder & Till von Wachter & Stefan Bender, 2012. "The Effects of Extended Unemployment Insurance Over the Business Cycle: Evidence from Regression Discontinuity Estimates Over 20 Years," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(2), pages 701-752.
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    34. repec:aei:rpbook:24945 is not listed on IDEAS
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    ALMP; unemployment insurance; disability insurance; moral hazard; activation;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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