This paper constructs a general equilibrium search-matching model with heterogeneous workers. Workers choose whether to invest in general human capital or specific human capital when they enter the labor market. We analyze how unemployment benefits affect the choice of the type of human capital...

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...

Change is an enduring feature of the economy and the labour market, even in normal times. The importance of adjusting to change, and of policies that promote adjustment, has been a recurring theme throughout David Dodge’s distinguished career. This paper deals with “displaced...

This paper examines the role of EI in providing support to “displaced workers,†those who permanently lose their jobs because of changing circumstances. Adjusting to change benefits Canadians as a whole. However, some workers suffer much more from job loss than do others. Those who...

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...

This paper explores the optimal interaction between the tax system and unemployment compensation in insuring people against the risks of involuntary unemployment and low ability.To that end, we introduce search unemployment in a model of optimal non-linear income taxation.We find that the...