Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/217192 
Year of Publication: 
2020
Citation: 
[Journal:] Quantitative Economics [ISSN:] 1759-7331 [Volume:] 11 [Issue:] 1 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2020 [Pages:] 437-469
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We study unemployment insurance in a framework where the main source of heterogeneity among agents is the type of household they live in: some agents live alone while others live with their spouses as a family. Our exercise is motivated by the fact that married individuals can rely on spousal income to smooth labor market shocks, while singles cannot. We extend a version of the standard incomplete-markets model to include two-agent households and calibrate it to the US economy with special emphasis on matching differences in labor market transitions across gender and marital status as well as aggregate wealth moments. Our central finding is that changes to the current unemployment insurance program are valued differently by married and single households. In particular, a more generous unemployment insurance reduces the welfare of married households significantly more than that of singles and vice versa. We show that this result is driven by the amount of self-insurance existing in married households, and thus, we highlight the interplay between self- and government-provided insurance and its implication for policy.
Subjects: 
Households
marriage
family
unemployment
unemployment insurance
worker flows
heterogeneous agents
JEL: 
D91
E24
J64
J65
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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