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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

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1935-1682
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Volume 10, Issue 1 (May 2010)

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Volume 6 (2006)

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Volume 1 (2001)

Family Job Search, Wage Bargaining, and Optimal Unemployment Insurance

Susanne Ek / Bertil Holmlund
Published Online: 2010-05-27 | DOI: https://doi.org/10.2202/1935-1682.2501

Abstract

In this paper we develop an equilibrium search and matching model where two-person families as well as singles participate in the labor market. We show that equilibrium entails wage dispersion among equally productive risk-averse workers. Marital status as well as spousal labor market status matters for wage outcomes. In general, employed members of two-person families receive higher wages than employed singles. The model is applied to a welfare analysis of alternative unemployment insurance systems, recognizing the role of spousal employment as a partial substitute for public insurance. The optimal system involves benefit differentiation based on marital status as well as spousal labor market status.

Keywords: wage bargaining; wage differentials; unemployment; unemployment insurance

About the article

Published Online: 2010-05-27


Citation Information: The B.E. Journal of Economic Analysis & Policy, ISSN (Online) 1935-1682, DOI: https://doi.org/10.2202/1935-1682.2501.

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