Optimal Unemployment Insurance: A Survey
Unemployment insurance improves the allocation of risk bearing at the cost of reduced incentives for work. In the past two decades, a branch of the literature has emerged that deals with the optimal design of unemployment insurance. This literature has been influenced by ideas and methods from information economics and by theories from labor economics. The result is a collection of models designed to highlight a variety of issues pertaining to the provision of optimal unemployment insurance. This paper reviews these issues, summarizes the relevant literature, assesses its accomplishments, and points out problems that require further study.
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Volume (Year): 66 (1999)
Issue (Month): 2 (October)
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