In this paper we consider a risk averse worker who is moving back and forth between employment and unemployment; layoffs are random and beyond the worker's influence, while the re-employment chance is directly affected by search effort. We characterize the worker's optimal savings and job-search...

Unemployment compensation in the United States is provided through a federal-state system of unemployment insurance (UI). UI provides temporary partial wage replacement to active job seekers who are involuntarily out of work. For older workers, UI is an important source of income security and a...

Many empirical studies have confirmed the theoretical prediction that longer-term Unemployment Insurance (UI) entitlement leads to longer unemployment duration. Most of those studies have examined special programs that provide extra weeks of unemployment benefits when unemployment rates in the...