European unemployment benefit scheme : a qualitative assessment

• Autor(a) principal: Virtuoso, Tomás Gomes Teixeira Esteves
• Data de Publicação: 2019
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/29092
• topic: Economic and Monetary Union; Fiscal union; Automatic stabiliser; Unemployment; European unemployment benefit scheme; Equivalent variant; Genuine variant; Permanent transfers; Institutional moral hazard; União Económica e Monetária; União orçamental; Estabilizador automático; Desemprego; Sistema europeu de subsídio de desemprego; Variante equivalente; Variante genuína; Transferências permanentes; Risco moral institucional; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

In the recent years, we have witnessed a discussion on whether the Economic and Monetary Union has been prepared to deal with crises that emerge from asymmetric shocks across European countries. Specifically, arguments for and against a possible fiscal union have been brought to the debate. In truth, a wide set of alternative automatic stabilisers can be considered, but we focus here on the potentialities of unemployment as a suitable adjustment variable. Then, trying to materialize a possible unemployment based automatic stabilizer in a concrete solution, we choose to follow closely the one presented in Beblavý et al. (2017), which specifies an European Unemployment Benefit Scheme. The proposal is divided in two fundamentally different options: equivalent variant and genuine one. After defining both alternatives, we perform a qualitative assessment of the strengths and vulnerabilities not only of the general idea but also of detailed alternatives. Issues like subsidiarity, national sovereignty, stabilisation capacity, labour mobility, heterogeneity and harmonization of national unemployment benefit schemes, among others, are assessed. Next, we analyse two kinds of perverse incentives that may arise with these schemes’ implementation, namely permanent transfers and institutional moral hazard. Here, we refer mechanisms as experience rating, claw-back, minimum requirements and a trigger as possible options to tackle an unbalanced incentives structure. We finalize making some remarks on the idea that if the equivalent variant may well become viably implemented in the medium term, the genuine one would probably be damaging and negative, not only in economic but also in political terms.