This paper studies the effects of unemployment policies in a simple static general equilibrium model with adverse selection in the labour market. Firms offer a contract that induces the self-selection of workers. In equilibrium, all unskilled workers are screened out and some skilled workers are...

This paper studies the effects of unemployment policies in a simple static general equilibrium model with adverse selection in the labor market. Firms offer a contract that induces the self-selection of workers. In equilibrium, all unskilled workers are screened out and some skilled workers are...