The Optimal Payment of Unemployment Insurance Benefits over Time
Steven Shavell,Laurence Weiss +1 more
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In this article, the authors used a theoretical model to determine characteristics of the time sequence of benefits that maximizes the expected utility of the unemployed, given that they act in a self-interested way and given the total size of the U.I. budget.Abstract:
The primary purpose of unemployment insurance (U.I.) is no doubt to insure individuals against loss of wage income. However, U.I. is commonly believed to adversely affect job search behavior and to lengthen the duration of unemployment. With these issues in mind, this paper asks how U.I. benefits ought to be paid out over time. Specifically, the paper uses a theoretical model to determine characteristics of the time sequence of benefits that maximizes the expected utility of the unemployed, given that they act in a self-interested way and given the total size of the U.I. budget.read more
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References
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Journal ArticleDOI
On Moral Hazard and Insurance
TL;DR: This paper focuses on the part of moral hazard when care is not observed by the insurer and the role of the insurer in this situation.
Journal ArticleDOI
Unemployment Compensation: Adverse Incentives and Distributional Anomalies
TL;DR: For a wide variety of ''representative'' unemployed workers, unemployment benefits replace more than 60 per cent of lost net income as discussed by the authors, in the more generous states, the replacement rate is over 80 per cent for men and over 100 per percent for women.
Journal ArticleDOI
Unemployment Insurance as Insurance for Workers
TL;DR: In this article, the application of unemployment insurance (UI) as an insurance policy for workers is discussed, and the basic model optimal insurance is proposed, along with details of UI tax and benefit rates.
Journal ArticleDOI
The Impact of Unemployment Insurance on Job Search
TL;DR: In the short run, there seems to be little politically acceptable opportunity to buy employment at the cost of inflation as mentioned in this paper, and the long-run tradeoff between unemployment and inflation seems intractable.