transactions cost-mobility constraints. Contracts provide full unemployment insurance for risks that are diversifiable by pooling … response to demand and productivity shifts. Unemployment is sustained because the marginal value of labor is not equated across … among firms. Nondiversifiable (macro) risks are only partially shifted,largely through self-insurance (contingency saving …

Previous research on unemployment insurance (UI) has focused on the costs of the program, in terms of the distorting … effects of generous UI benefits on worker and firm behavior. For assessing the optimal size of an unemployment insurance … consumption for the unemployed was 7%; my results imply that, in the absence of unemployment insurance, this fall would have been …

of higher unemployment insurance benefits, individuals who filed just before and just after sixteen benefit increases are … period of unemployment insurance receipt by about one week. This effect is precisely estimated and found using several … approaches. the incidence of layoffs resulting in unemployment insurance claims is unaffected by the increases. The evidence does …

This paper tests the effects of the level and length of unemployment insurance (UI) benefits on unemployment durations … are found to have a strong negative effect on the probability of leaving unemployment. However, the probability of leaving … unemployment rises dramatically just prior to when benefits lapse. When the length of benefits is extended, the probability of a …

Before 1979, unemployment insurance (UI) benefits were not treated as taxable income in the United States. Several … has had the predicted effect of reducing unemployment duration.The study uses data on a sample of persons that filed for … presents persuasive evidence of a tax effect on unemployment duration. The 1979 policy change is estimated to have reduced …

We use the model to evaluate a tax-financed unemployment insurance scheme. Higher insurance is beneficial for … unemployment effects, unless workers are close to indifferent between working and not working; thus, recent findings are …

This paper presents new evidence on why unemployment insurance (UI) benefits affect search behavior and develops a … unemployment durations caused by UI benefits is due to a "liquidity effect" rather than distortions in marginal incentives to …

welfare. This insight leads to a novel test for the optimality of unemployment insurance based on the responsiveness of … reservation wages to unemployment benefits. Some existing estimates imply significant gains to raising the current level of … unemployment benefits in the United States, but highlight the need for more research on the determinants of reservation wages. Our …

We study the optimal design of unemployment insurance for workers sampling job opportunities over time. We focus on the … liquidity to smooth their consumption; and providing unemployment subsidies that serve as insurance against the uncertain … absolute risk aversion preferences, a very simple policy is optimal: a constant benefit during unemployment, a constant tax …

This paper develops a model with multiple steady states (low tax and low unemployment versus high tax and high … unemployment) in which equilibrium selection is not conditioned on a sunspot variable. Instead, large temporary shocks initiate … possible that the transition to the high-unemployment steady state after a negative shock can be avoided if the government …