Kiel Working Papers, Kiel Institute for World Economics
No 1325:
Beschäftigungskonten für Deutschland
Alfred Boss, Alessio J. G. Brown and Dennis Snower
Abstract: We present a proposal for reforming unemployment
assistance in Germany through the introduction of unemployment accounts
(UAs). Instead of paying taxes that finance the unemployment assistance,
employed people make ongoing contributions to their UAs and can make
withdrawals from these accounts during periods of unemployment. The aim of
this policy proposal is to improve employment incentives without
significant changes in the current redistribution scheme. We provide a
detailed account of how such a system of UAs can be designed and
implemented in Germany. To make the influence of UAs as transparent as
possible and to avoid introducing other reforms that may make significant
bodies of people worse off, we assume that UAs are integrated within the
existing unemployment support system, keeping all institutional rules
regarding conditions, duration and size of entitlements as well as
interpersonal redistribution unchanged.
20 pages, June 2007
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