While there is a vast literature on the effect of unemployment insurance on unemployment duration, in almost all of these studies the replacement ratio is the key explanatory variable. Does not contest the almost universal findings that the higher the ratio of unemployment income to that of...

Any subsidy plan for supplementing low incomes tends to reduce labor supply, to the extent leisure is not an inferior good, by raising incomes over what they would be from earnings alone. Under a constant or increasing marginal tax rate subsidy plan, this tendency is reinforced by the fact that...