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Understanding the welfare effects of unemployment insurance policy in general equilibrium

Listed author(s):
  • Mukoyama, Toshihiko

This paper analyzes the welfare effects of unemployment insurance reforms in a general equilibrium incomplete market model. In particular, it decomposes the total welfare effect for each individual into different factors. I consider a model where the consumers face an uninsurable unemployment risk, can save in an interest-bearing asset, and are subject to a borrowing constraint. The labor market is modeled using a Diamond–Mortensen–Pissarides style search and matching model. The decomposition exercises reveal how each factor contributes to the heterogeneity of welfare effects among different consumers.

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File URL: http://www.sciencedirect.com/science/article/pii/S0164070413001444
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Article provided by Elsevier in its journal Journal of Macroeconomics.

Volume (Year): 38 (2013)
Issue (Month): PB ()
Pages: 347-368

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Handle: RePEc:eee:jmacro:v:38:y:2013:i:pb:p:347-368
DOI: 10.1016/j.jmacro.2013.08.022
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622617

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