Gaillard, Alexandre and Kankanamge, Sumudu (2021) Entrepreneurship and Labor Market Mobility: the Role of Unemployment Insurance. TSE Working Paper, n. 21-1187, Toulouse

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Abstract

We evaluate the effects of unemployment insurance variations in a general equilibrium
occupational choice model of entrepreneurship. We establish that the occupational flow
from unemployment to entrepreneurship is remarkably sensitive to unemployment insurance
generosity, corroborating our empirical findings. Beyond direct effects on unemployment,
we find large reallocations between employment and entrepreneurship relative
to changes in generosity. They contribute to an empirically consistent stable aggregate
employment rate, despite increasing unemployment. We show that an insurance coverage
effect, i.e. a change in the relative riskiness between occupations with respect to generosity,
is a key driver of our results.

Item Type: Monograph (Working Paper)
Language: English
Date: January 2021
Place of Publication: Toulouse
Uncontrolled Keywords: Entrepreneurship, Unemployment Insurance, Labor Market Mobility
JEL Classification: E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
J65 - Unemployment Insurance; Severance Pay; Plant Closings
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 08 Mar 2021 09:03
Last Modified: 08 Mar 2021 09:03
OAI Identifier: oai:tse-fr.eu:125253
URI: https://publications.ut-capitole.fr/id/eprint/42410
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