Abstract
Since the 1960s, Sweden has sustained a remarkably low unemployment rate while the average duration of unemployment spells has been increasing over time. This pattern is reproduced in an equilibrium search model incorporating progressive income taxes, generous unemployment compensation, and a program for preventing unemployed workers from abusing the system. Our analysis raises concerns about how well the Swedish system is equipped to handle the current situation of high unemployment.
Original language | English (US) |
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Pages (from-to) | 1043-1070 |
Number of pages | 28 |
Journal | European Economic Review |
Volume | 39 |
Issue number | 5 |
DOIs | |
State | Published - May 1995 |
Keywords
- Progressive income taxation
- Search model
- Sweden
- Unemployment
- Unemployment compensation
- Welfare state
ASJC Scopus subject areas
- Finance
- Economics and Econometrics