employed workers.In this setting, unemployment benefits that induce low quality workers to leave the labor force have important … efficiency as well as equity implications.In addition to unemployment benefits, the authorities can use a proportional income tax … unemployment benefits, even though they do not benefit directly.If unemployment benefits are financed by lump sum taxes, then …

low quality workers to leave the labor force can increase national income. Moreover, the operation of such a benefit … this setting, small migration flows can bring about large changes in transfer levels and in labor participation rates. The …