The paper is about the economically efficient design of financial transfers to the unemployed in a highly industrialized country. There have been quite a few contributions to this problem — for example by Beenstock/Brasse, Feldstein/ Altman, Grubel, Orzag/Snower — which are presented and...

Comparing the unemployment insurance systems of the United States and of the United Kingdom it is shown that the US unemployment insurance (UI) is the only system that provides for a negative feedback between UI expenditures and layoffs (“experience rating”). The UK has no specific UI:...

Standard macroeconomic models underpredict the volatility of unemployment fluctuations. A common solution is to assume wages are rigid. We explore whether this explanation is consistent with the data. We show that the wage of newly hired workers, unlike the aggregate wage, is volatile and...

This paper presents a theory explaining the labor market matching process through microeconomic incentives. There are heterogeneous variations in the characteristics of workers and jobs, and firms face adjustment costs in responding to these variations. Matches and separations are described...

This paper explores the evidence for positive hysteresis in the labor market. Using data from the National Longitudinal Surveys of Youth, we find that negative labor market outcomes during high-unemployment periods are mitigated by exposure to a high-pressure economy during the preceding...

This paper evaluates the ability of autoregressive models, professional forecasters, and models that incorporate unemployment flows to forecast the unemployment rate. We pay particular attention to flows-based approaches - the more reduced-form approach of Barnichon and Nekarda (2012) and the...