Abstract
In a two-country model the consequences of labour mobility on social insurance levels are studied. There are two groups of workers, one with a high risk and the other one with a low risk of being nonemployed. In both countries the decision-making function on social insurance is some weighted average of the expected utilities of both groups. In case low-risk workers are much more mobile than high-risk workers, it can be concluded that labour mobility does not necessarily have a downward effect on social insurance. In that case coordination of decision making would not improve the levels of social insurance.
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This is a revised version of the CentER paper 9161 “Centralized and decentralized decision making on social insurance in an integrated market”. Comments by an anonymous referee and Dieter Bös are gratefully acknowledged.
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Lejour, A.M., Verbon, H.A.A. Labour mobility and decision making on social insurance in an integrated market. Public Choice 79, 161–185 (1994). https://doi.org/10.1007/BF01047925
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DOI: https://doi.org/10.1007/BF01047925