Fuller, David L.; Ravikumar, B.; Zhang, Yuzhe - In: American Economic Journal: Macroeconomics 7 (2015) 2, pp. 249-90
An important incentive problem for the design of unemployment insurance is the fraudulent collection of unemployment benefits by workers who are gainfully employed. We show how to efficiently use a combination of tax/subsidy and monitoring to prevent such fraud. The optimal policy monitors the...