Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110725
Authors: 
Andersen, Torben M.
Kristoffersen, Mark Strom
Svarer, Michael
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 8991
Abstract: 
Unemployment insurance schemes include conditions on past employment history as part of the eligibility conditions. This aspect is often neglected in the literature which primarily focuses on benefit levels and benefit duration. In a search-matching framework we show that benefit duration and employment requirements are substitute instruments in affecting job search incentives and thus gross unemployment. We analyse the optimal design of the unemployment insurance system (benefit levels, duration and employment requirements) under a utilitarian social welfare function. Simulations show that a higher insurance motive captured by more risk aversion implies higher benefit generosity and more lax employment requirements but also shortened benefit duration.
Subjects: 
reentitlement effects
unemployment insurance
business cycle
JEL: 
E32
H3
J65
Document Type: 
Working Paper

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