Optimal Unemployment Insurance in a Matching Equilibrium
This article considers optimal unemployment insurance (UI) in an equilibrium matching framework where wages are determined by strategic bargaining. It compares the outcome with the standard Nash bargaining approach, which can be interpreted as union wage bargaining with an insider/outsider distortion. It also shows that a coordinated policy approach, one that chooses job creation subsidies and UI optimally, generates a much greater welfare gain than a policy that simply varies UI payments by duration.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Acemoglu, D. & Shimer, R., 1997.
"Efficient Unemployment Insurance,"
97-9, Massachusetts Institute of Technology (MIT), Department of Economics.
- Coles, Melvyn G. & Wright, Randall, 1998.
"A Dynamic Equilibrium Model of Search, Bargaining, and Money,"
Journal of Economic Theory,
Elsevier, vol. 78(1), pages 32-54, January.
- Melvyn Cole & Randall Wright, . "A Dynamic Equilibrium Model of Search, Bargaining, and Money," CARESS Working Papres 97-9, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Larry M. Ausubel & Raymond J. Deneckere, 1989. "Reputation in Bargaining and Durable Goods Monopoly," Levine's Working Paper Archive 201, David K. Levine.
- Melvyn Coles & Adrian Masters, 2004. "Duration-Dependent Unemployment Insurance Payments and Equilibrium Unemployment," Economica, London School of Economics and Political Science, vol. 71, pages 83-97, 02.
- van den Berg, G., 1987.
"Nonstationarity in job search theory,"
c2b931bf-9cce-4bae-929c-b, Tilburg University, School of Economics and Management.
- James Costain, 1997. "Unemployment insurance with endogenous search intensity and precautionary saving," Economics Working Papers 243, Department of Economics and Business, Universitat Pompeu Fabra.
- Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, March.
- Dale T. Mortensen, 1977. "Unemployment Insurance and Job Search Decisions," ILR Review, Cornell University, ILR School, vol. 30(4), pages 505-517, July.
- Cole, Harold L & Rogerson, Richard, 1999.
"Can the Mortensen-Pissarides Matching Model Match the Business-Cycle Facts?,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(4), pages 933-59, November.
- Harold L. Cole & Richard Rogerson, 1996. "Can the Mortonson-Pissarides matching model match the business cycle facts?," Staff Report 224, Federal Reserve Bank of Minneapolis.
- Fredriksson, P. & Holmlund, B., 1998.
"Optimal Unemployment Insurance in Search Equilibrium,"
1998-2, Uppsala - Working Paper Series.
- Fredriksson, Peter & Holmlund, Bertil, 2001. "Optimal Unemployment Insurance in Search Equilibrium," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 370-99, April.
- Fredriksson, Peter & Holmlund, Bertil, 1998. "Optimal Unemployment Insurance in Search Equilibrium," Working Paper Series 1998:2, Uppsala University, Department of Economics.
- Arthur J. Hosios, 1990. "On The Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Oxford University Press, vol. 57(2), pages 279-298.
- Hansen, Gary D., 1985.
"Indivisible labor and the business cycle,"
Journal of Monetary Economics,
Elsevier, vol. 16(3), pages 309-327, November.
- Ausubel, Lawrence M & Deneckere, Raymond J, 1989. "Reputation in Bargaining and Durable Goods Monopoly," Econometrica, Econometric Society, vol. 57(3), pages 511-31, May.
- James Albrecht & Susan Vroman, 2000.
"A Matching Model with Endogenous Skill Requirements,"
Econometric Society World Congress 2000 Contributed Papers
0774, Econometric Society.
- James Albrecht & Susan Vroman, 2002. "A Matching Model with Endogenous Skill Requirements," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 283-305, February.
- Cahuc, Pierre & Lehmann, Etienne, 2000. "Should unemployment benefits decrease with the unemployment spell?," Journal of Public Economics, Elsevier, vol. 77(1), pages 135-153, July.
- Carl Davidson & Stephen A. Woodbury, .
"Optimal Unemployment Insurance,"
Upjohn Working Papers and Journal Articles
cdsaw1997, W.E. Upjohn Institute for Employment Research.
- Hopenhayn, H. & Nicolini, P.J., 1996.
"Optimal Unemployment Insurance,"
RCER Working Papers
421, University of Rochester - Center for Economic Research (RCER).
- Lars Ljungqvist & Thomas Sargent, 1999. "Matlab code for Hopenhayn-Nicolini's optimal unemployment insurance model," QM&RBC Codes 18, Quantitative Macroeconomics & Real Business Cycles.
- Steven Shavell & Laurence Weiss, 1978.
"The Optimal Payment of Unemployment Insurance Benefits over Time,"
Cowles Foundation Discussion Papers
503, Cowles Foundation for Research in Economics, Yale University.
- Shavell, Steven & Weiss, Laurence, 1979. "The Optimal Payment of Unemployment Insurance Benefits over Time," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1347-62, December.
- Melvyn G. Coles & Andrew K. G. Hildreth, 2000. "Wage Bargaining, Inventories, and Union Legislation," Review of Economic Studies, Oxford University Press, vol. 67(2), pages 273-293.
- James Albrecht & Susan Vroman, 2005.
"Equilibrium Search With Time-Varying Unemployment Benefits,"
Royal Economic Society, vol. 115(505), pages 631-648, 07.
- James Albrecht & Susan Vroman, 2001. "Equilibrium Search with Time-Varying Unemployment Benefits," CESifo Working Paper Series 487, CESifo Group Munich.
- Adrian Masters & Melvyn Coles, 2004. "Duration Dependent Unemployment Insurance and Stabilisation Policy," Discussion Papers 04-10, University at Albany, SUNY, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:ucp:jlabec:v:24:y:2006:i:1:p:109-138. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division)
If references are entirely missing, you can add them using this form.