distribution is endogenously determined. We use this model to analyze the comparative statics effects of increases in unemployment … compensation on the unemployment rate and aggregate welfare taking into account the induced change in the wage offer distribution … a selective increase in unemployment compensation, made available to those who impute a relatively low value to leisure …

In this paper the effects of unemployment on mental health are analysed. A simple model where both the occurrence of … and duration of unemployment are allowed to affect mental health is specified. Panel data are used to control for "fixed …