idiosyncratic employment shocks against which they cannot insure directly. The labor market has a Diamond … matching function. Wages are determined through Nash bargaining. We also consider aggregate productivity shocks, and a complete …We use the model to evaluate a tax-financed unemployment insurance scheme. Higher insurance is beneficial for …

consumption for the unemployed was 7%; my results imply that, in the absence of unemployment insurance, this fall would have been …Previous research on unemployment insurance (UI) has focused on the costs of the program, in terms of the distorting … effects of generous UI benefits on worker and firm behavior. For assessing the optimal size of an unemployment insurance …

of higher unemployment insurance benefits, individuals who filed just before and just after sixteen benefit increases are … period of unemployment insurance receipt by about one week. This effect is precisely estimated and found using several … approaches. the incidence of layoffs resulting in unemployment insurance claims is unaffected by the increases. The evidence does …

This paper tests the effects of the level and length of unemployment insurance (UI) benefits on unemployment durations … are found to have a strong negative effect on the probability of leaving unemployment. However, the probability of leaving … unemployment rises dramatically just prior to when benefits lapse. When the length of benefits is extended, the probability of a …

Before 1979, unemployment insurance (UI) benefits were not treated as taxable income in the United States. Several … unemployed persons to conduct longer than socially optimal job searches. Since 1979, however, UI benefits received by persons in … has had the predicted effect of reducing unemployment duration.The study uses data on a sample of persons that filed for …

response to demand and productivity shifts. Unemployment is sustained because the marginal value of labor is not equated across … transactions cost-mobility constraints. Contracts provide full unemployment insurance for risks that are diversifiable by pooling … atheory of consumption rigidity rather than wage rigidity. Another empirical implication is that unemployment incidence is …

This paper presents new evidence on why unemployment insurance (UI) benefits affect search behavior and develops a … unemployment durations caused by UI benefits is due to a "liquidity effect" rather than distortions in marginal incentives to … effects on durations for liquidity constrained households. Second, lump-sum severance payments increase durations …

welfare. This insight leads to a novel test for the optimality of unemployment insurance based on the responsiveness of … reservation wages to unemployment benefits. Some existing estimates imply significant gains to raising the current level of … unemployment benefits in the United States, but highlight the need for more research on the determinants of reservation wages. Our …

We study the optimal design of unemployment insurance for workers sampling job opportunities over time. We focus on the … absolute risk aversion preferences, a very simple policy is optimal: a constant benefit during unemployment, a constant tax … during employment, and free access to savings using the riskless asset. Away from this benchmark, for constant relative risk …

This paper develops a model with multiple steady states (low tax and low unemployment versus high tax and high … unemployment) in which equilibrium selection is not conditioned on a sunspot variable. Instead, large temporary shocks initiate … possible that the transition to the high-unemployment steady state after a negative shock can be avoided if the government …