This paper studies how changes in the two key parameters of unemployment insurance - the benefit replacement rate (RR) and the potential duration of benefits (PBD) - affect the duration of unemployment. In 1989, the Austrian government made unemployment insurance more generous by changing,...

Many countries suffer from persistently high unemployment rates. The scope for labor market reforms is often limited to measures that hurt neither shareholders nor workers. This paper develops a policy proposal, which allows the government to reduce wage costs without changing the income...