Showing papers by "Robert E. Lucas published in 1995"

TL;DR: In this article, the authors describe the efficient allocation of consumption and work effort in an economy in which workers face idiosyncratic employment risk and considerations of moral hazard prevent full insurance, and they impose a lower bound on the expected discounted utility that can be assigned to any agent from any date onward and show that the efficient unemployment insurance scheme induces an invariant cross-sectional distribution of individual entitlements to utility.