Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • April 2002
  • Article
  • Journal of Labor Economics

The Determination of Unemployment Benefits

By: Rafael Di Tella and Robert J. MacCulloch
  • Format:Print
  • | Pages:31
ShareBar

Abstract

While much empirical research exists on labor market consequences of unemployment benefits, there is remarkably little evidence on the forces determining benefits. We present a simple model where workers desire insurance against unemployment risk and benefits increase the unemployment rate. We then conduct one of the first empirical analyses of the determinants of the parameters of the benefit system. Using data for developed countries for 1971–89, controlling for year and country fixed effects and the government’s political color, we find evidence that the level of benefits falls when the unemployment rate is high. This is consistent with Wright’s tax effect.

Keywords

Unemployment; Compensation and Benefits

Citation

Di Tella, Rafael, and Robert J. MacCulloch. "The Determination of Unemployment Benefits." Journal of Labor Economics 20, no. 2 (April 2002): 404–34.
  • Find it at Harvard
  • Read Now

About The Author

Rafael M. Di Tella

Business, Government and the International Economy
→More Publications

More from the Authors

    • February 2023
    • Faculty Research

    The Trouble with TCE

    By: Vincent Pons and Rafael Di Tella
    • 2022
    • Faculty Research

    Causal Inference During A Pandemic: Evidence on the Effectiveness of Nebulized Ibuprofen as an Unproven Treatment for COVID-19 in Argentina

    By: Sebastian Calonico, Rafael Di Tella and Juan Cruz Lopez Del Valle
    • 2021
    • Faculty Research

    Does Social Media Cause Polarization? Evidence from Access to Twitter Echo Chambers during the 2019 Argentine Presidential Debate

    By: Rafael Di Tella, Ramiro H. Gálvez and Ernesto Schargrodsky
More from the Authors
  • The Trouble with TCE By: Vincent Pons and Rafael Di Tella
  • Causal Inference During A Pandemic: Evidence on the Effectiveness of Nebulized Ibuprofen as an Unproven Treatment for COVID-19 in Argentina By: Sebastian Calonico, Rafael Di Tella and Juan Cruz Lopez Del Valle
  • Does Social Media Cause Polarization? Evidence from Access to Twitter Echo Chambers during the 2019 Argentine Presidential Debate By: Rafael Di Tella, Ramiro H. Gálvez and Ernesto Schargrodsky
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College