We examine the optimal labor market-policy mix over the business cycle. In a search and matching model with risk …- cancy subsidy, a layoff tax and unemployment benefits. We derive analytical expressions for the optimal setting of each of … replacement rate of unemployment insurance should all rise in recessions. We find this confirmed in a calibration targeted to the …

temporary severing of employment relationships followed by a phase of more standard labour market search and matching, we use … stock and flow data to understand key developments. We find dramatic changes in employment, unemployment and labour market …