Unemployment And Unemployment Insurance: Evidence From Changchun

Unemployment has become a hot topic in labor economics and public economics. Unemployment theory has being continuously developed and perfected. The classical unemployment theory believed that wage can adjust labor supply. Keynesian used the insufficiency of effective demand to explain unemployment. Romer used real business cycle theory to explain that unemployment is an optimal response based on optimal consumption of different impacts on production. Friedman used additional Phillips curve to explain both high inflation and high unemployment coexistence. Solow proposed efficient wage theory, its core is a rent of moral hazard which comes from principal-agent relationship under asymmetric information. Shapiro and Stiglitz considered that between the efficient wage paid by manufacturers and the unemployment rate had a negative correlation. Diamond. Pissarides and Howitt brought forward and developed the search and match model. Azariadis put forward the implicit contract theory. Lindbeck and Snower put forward the insider outsider theory. Phelps thinks that labor union is one of the factors leading to hysteresis phenomenon. Arrow proposed the "learning-by-doing". Todaro and Harris proposed a transfer model to explain the transfer of population in developing countries which exists in a two-sector economy.This paper uses Changchun micro data to analyze the employment and unemployment and the labor force participation rate. In terms of age and gender, the unemployment rate for female is higher than male, and the unemployment rate has generally declined as age increased. Employment rate of male exceed that of female. Participation rate of both male and female increased after the first lower. In terms of sex and education group, unemployment peaked at the level of senior high school and vocational education these two groups. Male who receives vocational education and primary education has higher unemployment rate than that of female, others are lower than that of female. The participation rate of male is higher than female in all levels of education, the employment rates with both male and female are increased as the education increased. To further examine the influence of various factors on worker's decision of employment or unemployment. First, we use probit model to analyze the effect on these factors, these factors include age, family size, gender, education and marital status, which deceived labor force enter or exist labor force market. The results show that: age has a negative impact on female between 15 and24 year-old and male between 15 and 24 year-old. This shows that they are more likely to unemployment or withdraw from labor market; Family size has negative impact on female and male above 60, has positive impact on the others. The sign of education are mostly positive. Marital status has positive impact on male above 25, has negative impact on the others.Second, we use multinomial logit model to analyze the effect of age, family size, gender, education and marital status on the worker's decision of employment, unemployment or withdraw from labor market. The results show that: Age has negative impact on labor force whose age are under 35, has positive impact on labors whse age are above 35; Family size has negative impact on female whose age between 45 and 54, other group have positive impact; The signs of education are different, but the influence increased as the education increased; Marital status has negative impact besides female between 45 and 54. This shows that getting married are not likely to withdraw from the labor force or unemployment.Microsimulation model is a kind of new policy analysis model in the western economic model with the development of computer technique in 1960s. Microsimulation model researches the micro unit, and simulates and analyses the allotment effect of policy, such as tax, housing, the society security...etc. In the socialism market economy system of our country, many reforms need to carry out and perfect. Therefore, this kind of model has the extensively applied foreground, and it will be a kind of indispensable tool to analyze and constitute the policy.This paper provides a dynamic microsimulation model to analyze unemployment insurance institution in China. The model adopts the simulation method of event-based, and at any time changes to evolve forward. The model mainly includes two events: (1)The life events, include the death, bearing, education, marriage, taking up an occupation and income; (2)The policy carrying out events, include the financing and the providing of unemployment insurance benefit.We carry out the model by applying Visual-Fox, the whole simulation process is database-based, and the database includes the micro database and macro databases.We do some simulation experiments of unemployment insurance policies by Changchun micro-data. We simulate and analyze four kinds of unemployment insurance policy under two kinds of unemployment rate: (1) the unemployment insurance system we use now; (2) all workers are in for the unemployment insurance system. If someone becomes unemployment, he can receive unemployment insurance benefit, about 120 per cent of minimum living guarantee. This benefit lasts two years; (3) all workers are in for the unemployment insurance system. If someone becomes unemployment, the first year, e can receive 75 per cent of average incomes, the second year, he can receive 50 per cent of average incomes; (4) all workers are in for the unemployment insurance system. If someone becomes unemployment, from the first to fourth month, he can receive 80 per cent of average incomes, from fifth month to eighth month, he can receive 70 per cent of average incomes, from ninth month to tenth month, he can receive 60 per cent of average incomes, the last month, he can receive 70 per cent of average incomes .The results show: Under both low and high unemployment rate, the third action is the best one. It can make income and expenses of unemployment insurance are balanced.These researches expanded the application of the microsimulation model in macroscopic economy analyze of application effectively, and make the foundation for the development and application of the microsimulation model in the future.