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left on the labor market prior to retirement. This short horizon implies a more digressive replacement ratio. However …, there is a sufficiently short distance to retirement for which flat unemployment benefits can be the optimal contract as the … optimal contract that integrates unemployment insurance and retirement pension systems. …
Persistent link: https://www.econbiz.de/10005822369
I construct a dynamic contracting model of optimal unemployment insurance with adverse selection and moral hazard that captures the transition from unemployment to non-participation observed in the data, which the standard moral hazard model fails to capture. My model generates both qualitative...
Persistent link: https://www.econbiz.de/10010533896
We derive the shape of optimal unemployment insurance (UI) contracts when agents can exert search effort but face different search costs and have private information about their type. We derive a recursive solution of our dynamic adverse selection problem with repeated moral hazard. Conditions...
Persistent link: https://www.econbiz.de/10005762054
The costs of searching for a job vacancy are typically associated with fric- tion that deters or delays employment of potentially productive individuals. We demonstrate that in a labor market with moral hazard where effort is non- contractible, job search costs play a positive role, whose effect...
Persistent link: https://www.econbiz.de/10011272231
A welfare analysis of unemployment insurance (UI) is performed in a general equilibrium job search model. Finitely-lived, risk-averse workers smooth consumption over time by accumulating assets, choose search effort when unemployed, and suffer disutility from work. Firms hire workers, purchase...
Persistent link: https://www.econbiz.de/10005772360
The issue of whether unemployment benefits should increase or decrease over the unemployment spell is analyzed in a tractable model allowing moral hazard, adverse selection and hidden saving. Analytical results show that when the search productivity of unemployed is constant over the...
Persistent link: https://www.econbiz.de/10005761875
In this study, we ask whether the presence of precautionary savings substantially reduces the optimal replacement rate in an economy characterized by equilibrium unemployment and moral hazard. In line with previous studies, the optimality criterion based on comparisons of steady states leads to...
Persistent link: https://www.econbiz.de/10005132860
Recently some authors have proposed to introduce a system of individual unemployment savings accounts as an alternative to traditional public unemployment insurance. In this paper we investigate the feasibility of individual accounts as a possible alternative route to address the...
Persistent link: https://www.econbiz.de/10011004559
Recently some authors have proposed to introduce a system of individual unemployment savings accounts as an alternative to traditional public unemployment insurance. In this paper we investigate the feasibility of individual accounts as a possible alternative route to address the...
Persistent link: https://www.econbiz.de/10005150654
Evidence suggests that unemployed individuals sometimes can affect their job prospects by undertaking a costly action like deciding to move or retrain. Realistically, such an opportunity arises only for some individuals and the identity of those is unobservable. Unemployment insurance should...
Persistent link: https://www.econbiz.de/10010547525