Unemployment Insurance Savings Accounts and Collective Wage Determination

33 Pages Posted: 26 Nov 2007

See all articles by Laszlo Goerke

Laszlo Goerke

University of Trier - Institute of Labour Law and Industrial Relations in the European Union; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: November 2007

Abstract

Unemployment Insurance Savings Accounts (UISAs) entitle workers to unemployment benefits at the expense of future pension payments. Therefore, such accounts make unemployment less attractive, intensify job search, and raise employment. In the present paper the wage and employment consequences of UISAs are investigated in a model of collective wage determination. In the basic set-up, UISAs induce a trade union to lower wages. This effect can also arise if (1) balanced-budget repercussions are taken into account, (2) individual job search is incorporated, and (3) wage-dependent pensions are allowed for. However, the requirements for negative wage effects to arise become stricter than in the base model. Thus, collective bargaining creates additional impediments for the positive employment consequences of UISAs.

Keywords: employment, trade union, unemployment accounts, unemployment benefits, wages

JEL Classification: J38, J51, J65, J68

Suggested Citation

Goerke, Laszlo, Unemployment Insurance Savings Accounts and Collective Wage Determination (November 2007). IZA Discussion Paper No. 3141, Available at SSRN: https://ssrn.com/abstract=1032575

Laszlo Goerke (Contact Author)

University of Trier - Institute of Labour Law and Industrial Relations in the European Union ( email )

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