Recurrent unemployment,welfare benefits and heterogeneity

The objective of this paper is to investigate the causes of the recurrences of individuals in unemployment during benefit periods. So as to attain this objective, we use administrative data from the Spanish Employment Agency to estimate a duration model with multiple spells that allows for unemployment state dependence through lagged unemployment duration in order to distinguish the heterogeneity and scarring effects. We find that an increase in the duration of previous unemployment benefit periods lengthens the expected duration of future unemployment benefit periods. True state dependence and heterogeneity, intensity of job search and local labour market conditions are among the elements that explain this unemployment state dependence.     

On the welfare benefits of an international currency

Is it beneficial for a country's currency to be used internationally? And, if so, can we quantify the benefit? Since the emergence of the euro, there has been great interest in the consequences of a transfer of the dollar's premier international role to the euro. This paper presents a novel model-based approach towards assessing the welfare benefits associated with the international use of a country's currency. Apart from the familiar benefits associated with seigniorage, residents of the issuing country experience an increase in the purchasing power of their currency both at home and abroad. In the calibration exercise carried out in this paper, we find the benefits of an international currency to be quantitatively significant. The welfare gain for the Euro area in having the euro internationally used ranges from 1.9% to 2.3% of consumption depending on relative inflation rates. The rest of the world is not indifferent as to which currency circulates as the dominant international currency. Conditional on their currency not being used internationally, their preference is for the dominant international currency to be the one with the lowest inflation rate.     

Using a 401(h) account to fund retiree health benefits from your pension plan

If a health and welfare plan covering retirees faces financial shortfalls, administrators and trustees can fund retiree health benefit payments from a related pension plan that may be in better condition. This method is legal and ethical, but it requires sophisticated accounting techniques for creating an account that provides retiree members with promised benefits while meeting statutory and regulatory requirements.     

Optimal welfare and in-work benefits with search unemployment and observable abilities

This paper explores the optimal interaction between the tax system and social assistance in insuring people against the risks of involuntary unemployment and low ability. To that end, we introduce search unemployment in a model of optimal non-linear income taxation. The relationship between welfare benefits and the optimal level of in-work benefits is U-shaped. This explains why in-work benefits are called for both in countries that grant low welfare benefits and countries that provide high welfare benefits. An earned-income tax credit optimally induces all agents to look for work if job search is cheap and effective, agents are not very risk averse, and the least-skilled agents are relatively productive.     

Aggregate spillovers magnify the welfare benefits of tax reform

Relatively small degrees of aggregate increasing returns to scale ubstantially magnify both welfare benefits and income effects associated with tax reform. External returns to scale of 10 per cent increase the welfare benefits of tax reform by roughly one-third and increase changes in income by significantly more than a model characterized by constant returns to scale. Aggregate spillovers of 20 per cent increase welfare benefits by roughly three-fourths. Aggregate spillovers significantly reduce tax revenue-maximizing capital tax rates. This research convincingly demonstrates the importance of precisely identifying the degree of aggregate returns to scale before the benefits of tax reform can be accurately assessed. JEL Classification: E62, O40
Des degrés relativement faibles de rendements croissants à l'échelle augmentent substantiellement les effets positifs de bien-être et les effets de revenus associés à une réforme fiscale. Des rendements externes à l'échelle de 10 pour-cent accroissent les effets positifs de bien-être d'une réforme fiscale d'un bon tiers, et les effets de revenus d'une manière significative par rapport à ce qui'ils seraient dans le cas de rendements constants à l'échelle. Des effets agrégés de retombée de 20 pour-cent augmentent les effets positifs de bien-être des trois quarts. Ces effets agrégés de retombée tendent à réduire les taux d'imposition du capital qui maximisent les revenus. Ces travaux montrent l'importance d'une identification précise du degré des rendements agrégés à l'échelle si l'on veut jauger avec justesse les effets positifs de bien-être d'une réforme fiscale.     

Future trends of welfare benefits in the '90s

A number of economic and demographic factors have had a marked effect on welfare plans in Canada and will continue to affect them for the rest of the decade. This situation presents major challenges for plan trustees.     

Evaluate and communicate health care benefits

Both employers and employees need appropriate information to make intelligent decisions about health care benefits. For employers, analysis of health care data offers an approach to monitoring quality care and can provide a tool for controlling costs. For employees, an education and communication strategy is probably the single most important factor influencing both program utilization and employee acceptance.     

The impact of welfare benefits on natives' and immigrants' attitudes toward immigration

We investigate the effect of the relative welfare dependence of immigrants on attitudes toward further immigration of different groups of the population in a pooled cross-section of 24 European countries for the 2004–2010 period. Explicitly controlling for the dependence of immigrants and natives on welfare benefits we find that in countries with higher take-up rates among immigrants relative to natives pro-immigration attitudes, very robustly, increase more strongly with increasing educational attainment and, slightly less robustly, decline more strongly with the age of natives. Within the group of immigrants, by contrast, the impact of age on pro-immigration attitudes is more favorable with increasing relative benefit take-up of immigrants.     

Understanding multiemployer health and welfare plan financial statements

The trustees of a health and welfare plan may choose to delegate monitoring of the plan's financial operations. Still, it is important that they have a basic understanding of welfare plan financial statements.     

Designing your health benefit plan

A health care benefit plan should meet the needs and expectations of your organization and its insureds. Each organization is unique, so a health care benefit plan shouldn't be "off the shelf" but be uniquely tailored for your organization. Analyze current demographic, utilization and other data to determine which services members and their families are using and what type of services may be needed in the future.     

The welfare economics of a health plan merger

Recently, two large health maintenance organizations (HMOs) in Minneapolis merged to form a single company with over half of the total Twin Cities HMO enrollment. This paper strongly suggests that the merger will have adverse consequences for consumers. I use a model of health plan rivalry and empirical demand functions to predict that health insurance premiums in 6 Twin Cities firms will rise by as much as 19 percent after the merger. Next, I show how to calculate the loss in consumer surplus in a discrete choice model and predict that the merger will reduce surplus by 4.4% on average. Several objections to these conclusions are considered but, on the whole, the analysis raises serious concerns for public policy toward HMO mergers.