We study the role of preferences in the process of unemployment benefit determination. Perhaps surprisingly, survey evidence for the UK suggests that both the employed and unemployed wish to see a more generous level of unemployment benefits.

We present a simple model where unemployment benefits are determined in an economy in which there is endogenous delay in finding a job so that workers desire insurance against the possibility of unemployment.

We analyze the relationship between the family and the Welfare State when intra-family transfers are governed by risk-sharing considerations (i.e. not by altruism). For the benchmarl case, the classic neutrality result is obtained: more generous unemployment benefits, provided by the State,...