Alternative ways to organize government subsidies to unemployment insurance (UI) are analyzed in a right-to-manage model where industry level unions run UI funds of their own. It is shown that equilibrium unemployment is decreasing in the share of UI financed by the employed union members. A...

This paper analyses the effects of an unemployment insurance with limited potential duration in a job search model with endogenous effort. Both constant and declining time sequence of benefits are considered. The model extends the framework of Pissarides (2000) in assuming that workers maximise...