Public Pensions, Unemployment Insurance, and Growth

Journal of Public Economics, Vol. 75, Issue 2, February 2000

Posted: 19 Aug 2001

See all articles by Giacomo Corneo

Giacomo Corneo

Free University of Berlin (FUB); Universität Osnabrück - Faculty of Business Administration - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Marko Marquardt

University of Bonn

Abstract

We develop an overlapping-generations model that highlights the interaction between an unfunded pension program and an unemployment insurance program in the presence of a labor market with union wage-setting. Both programs are financed by earmarked proportional wage taxes levied on firms and their employees. The equilibrium path entails endogenous growth and involuntary unemployment. The presence of spillovers between pension programs and unemployment insurance programs has striking implications for growth policy, efficiency issues, and the transition to a fully-funded pension system.

Keywords: Public pensions, Unemployment insurance, Equilibrium unemployment, Endogenous growth

JEL Classification: E24, H55, J51

Suggested Citation

Corneo, Giacomo and Marquardt, Marko, Public Pensions, Unemployment Insurance, and Growth. Journal of Public Economics, Vol. 75, Issue 2, February 2000. Available at SSRN: https://ssrn.com/abstract=252765

Giacomo Corneo (Contact Author)

Free University of Berlin (FUB) ( email )

Van't-Hoff-Str. 8
D-10785 Berlin, Berlin 14195
Germany

Universität Osnabrück - Faculty of Business Administration - Department of Economics ( email )

Rolandstr. 8
Osnabrueck, D-49069
Germany
+49 541 969 2730 (Phone)
+49 541 969 2722 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Marko Marquardt

University of Bonn

Postfach 2220
Bonn, D-53012
Germany

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