This paper presents a tractable dynamic general equilibrium model that can explain cross-country empirical regularities in geographical mobility, unemployment and labor market institutions. Rational agents vote over unemployment insurance (UI), taking the dynamic distortionary e.ects of...

We consider positive and normative aspects of subsidizing work arrangements where subsidies are paid in time of low demand and reduced working hours so as to stabilize workers' income. In a matching framework such an arrangement increases labor demand. Tightening eligibility to short-time work...

A key question in labor market research is how the unemployment insurance system affects unemployment rates and labor market dynamics. We revisit this old question studying the German Hartz reforms. On average, lower separation rates explain 76% of declining unemployment after the reform, a fact...

This paper points out an empirical failing of real business cycle models in which unemployment is endogenized through a matching function. One can easily choose a calibration to make the cyclical fluctuation in unemployment as large in the model as it is in the data, or to make the response of...

This paper investigates how a mandatory activation program in Denmark affects the job finding rate of unemployed workers.The activation program was introduced in an experimental setting where about half of the workers who became unemployed in the period from November 2005 to March 2006 were...

This paper analyzes the design of optimal unemployment insurance in a search equilibrium framework where search effort among the unemployed is not perfectly observable.We examine to what extent the optimal policy involves monitoring of search effort and benefit sanctions if observed search is...