Du Toit, Charlotte Barbara2008-02-152008-02-152006-10Gupta, R & Du Toit, C 2006, 'Active versus passive policies of unemployment : growth and public finance perspectives', University of Pretoria, Department of Economics, Working paper series, no. 2006-20. [http://web.up.ac.za/default.asp?ipkCategoryID=736&sub=1&parentid=677&subid=729&ipklookid=3]http://hdl.handle.net/2263/4514This paper develops a general equilibrium endogenous growth model in an overlapping generations framework, and compares, in terms of economic growth, a passive unemployment policy (unemployment insurance) with an active unemployment policy (government expenditures targeted towards improving the jobfinding probability of an unemployed). Besides, the standard result of unemployment being growth reducing, under realistic parameterization, we show that the government, under an active policy, can generate higher growth without any compromise on its own consumption, when compared to the unemployment benefit regime. The result, however, depends crucially on the efficiency with which the resources are spent in creating employment.717114 bytesapplication/pdfenUniversity of Pretoria, Department of EconomicsActive policies of unemploymentPassive policies of unemploymentUnemployment benefitsEndogenous growthUnemploymentEconomic developmentWorking Paper