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Efficient Unemployment Insurance Author info | Abstract | Publisher info | Download info | Related research | Statistics Acemoglu, D.
Shimer, R.
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This paper argues that moderate unemployment insurance not only reduces the uncertainty faced by risk-averse workers but also improves efficiency and raises output. We develop a model in which the decentralized equilibrium is inefficient without unemployment insurance, because the labor market endogenously creates jobs that provide risk-averse workers with low unemployment risk and low wages. Essentially, the labor market offers its own version of insurance.
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Paper provided by Massachusetts Institute of Technology (MIT), Department of Economics in its series Working papers with number
97-9.
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Length: 37 pages
Date of creation: 1997Date of revision:
Handle: RePEc:mit:worpap:97-9Contact details of provider: Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), DEPARTMENT OF ECONOMICS, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA Phone: (617) 253-3361 Fax: (617) 253-1330 Web page: http://econ-www.mit.edu/ More information through EDIRC
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Keywords: EFFICIENCY WAGES UNEMPLOYMENT RISK Other versions of this item:
Find related papers by JEL classification: D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings
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Working papers
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Other versions:
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97-25, Massachusetts Institute of Technology (MIT), Department of Economics.
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