Modelling welfare state reform by G. M. M. Gelauff

By G. M. M. Gelauff

With a purpose to learn the commercial results of assorted coverage proposals for reforming the welfare country a version has been built known as MIMIC. The constitution of this version is gifted within the first a part of this e-book. The version combines quite a few glossy labour industry theories with an in depth description of correct labour marketplace associations in an utilized normal equilibrium context. the second one a part of the amount includes an complex presentation of the simulation result of MIMIC, akin to numerous tax regulations, a discount in advantages or the reputable minimal wages, individualization of the tax and social protection method and the creation of damaging source of revenue tax. The version has proved to be a different device for coverage assessment for the Netherlands

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4). 25) implies that the number of candidates being accepted after an interview will fall if the ratio between the minimum wage rate and marginal labour costs rises. 5sd 2 r sdj\ with E(hj) = hy (2·26) The average productivity of all potential job-worker combinations (fi·) is normalized to one. 27) where G is the cumulative distribution function of the standard normal 99 distribution . Labour productivity being too low to match the minimum wage is not the only reason that a potential job-worker combination does not result in a jobmatch.

Goods transactions of pension funds, government and social security are aggregated and included in the public sector submodel. 3. Hence the wage curve is seen to represent an inverse relation between unemployment and wages in the figure. 3 Equilibrium unemployment on the labour market W: real wage u: unemployment Ld: labour demand Ls: labour supply Ws: Wage curve Ls, Ld The financial market is treated in a simple way. Interest rates in the Netherlands and the value of the guilder are fully linked to German interest rates and the value of the Mark, because under standing monetary policy they follow these very closely.

52 Chapter 2 wage and lowest wage scales is currently lower than in 1983, it is assumed that a further reduction in the official minimum wage will exert an even smaller influence on the lowest wage scales in collective agreements of about 25%. The research of Ministry of Social Affairs and Employment (1990) also shows that the average wage level in minimum wage scales is about 5% higher than the official minimum wage level. The influence of the official minimum wage on minimum wage scales is therefore likely to be higher in case the official minimum wage rises, becoming almost proportional once the official minimum wage level equals the level of the minimum wage scale.

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