Mitman, Kurt; Rabinovich, Stanislav - In: Journal of Monetary Economics 71 (2015) C, pp. 99-118
The optimal cyclical behavior of unemployment insurance is characterized in an equilibrium search model with risk …-averse workers. Contrary to the current US policy, the path of optimal unemployment benefits is pro-cyclical – positively correlated … with productivity and employment. Furthermore, optimal unemployment benefits react non-monotonically to a productivity …