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The Optimal Time Profile of UI Policy

In: Modelling Unemployment Insurance

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  • Paola Potestio

    (Roma Tre University)

Abstract

Different scenarios, different problems and related analytical frameworks compose the very large set of models that formalize the optimal dynamic movements of the UI policy. The general issue of the time sequence of UI benefits and a tax after re-employment, the specific complexities of the trade-off between incentive and insurance in the presence of hidden savings, adverse selection problems and a hidden labour market are some of the questions addressed within a partial equilibrium setting. The set also includes a bridge and an equivalence result between the two traditional independent approaches to the UI problem. Different modalities for UI action, and thus different positions of unemployed workers, and different representations of the wage bargaining process characterize the models developed within a general equilibrium setting. The UI policy messages from the models of all these equilibrium settings, the subsequent adjustments and the conflicting indications are commented on extensively.

Suggested Citation

  • Paola Potestio, 2022. "The Optimal Time Profile of UI Policy," Contributions to Economics, in: Modelling Unemployment Insurance, chapter 0, pages 59-128, Springer.
    • Handle: RePEc:spr:conchp:978-3-030-91319-9_4
    DOI: 10.1007/978-3-030-91319-9_4
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