Behavioural Assumptions in Labour Economics

Behavioural Assumptions in Labour Economics: Analysing Social Security Reforms and Labour Market Transitions

The thesis consists of two parts: Part I evaluates theoretical policy proposals and Part II tests empirically several behavioural assumptions in labour economics. Part I contains two chapters that assess the labour market effects of introducing savings accounts into the system of social security. Chapter 2 examines the labour market effects of replacing the existing unemployment insurance system by unemployment accounts. The study reveals that the impact of UAs depends crucially on the assumptions on time preferences. Next, the labour market consequences of life course schemes are analysed in Chapter 3. It is demonstrated that life course schemes may have important labour supply effects if they significantly increase savings and if these increased savings affect labour supply decisions. Basically, the first part of the thesis points out behavioural assumptions that are key to the effectiveness of social security savings accounts.