Dual-Labor Market and Unemployment Compensation

Labor Market Cycles and Unemployment Insurance Eligibility

If entitlement to UI bene…ts must be earned with employment, generous UI is an additional bene…t to an employment relationship, so it promotes job creation. If individuals are risk neutral, UI is fairly priced, and the UI system prevents moralhazard unemployed workers, the generosity of UI has no e¤ect on unemployment. As with Ricardian Equivalence, this result should be useful to pinpoint the ...

Unemployment Insurance and the Labor Market

The existing literature assumes that unemployment insurance (UI) a↵ects the labor market through the job finding rate of eligible workers. I argue that this focus is too narrow. I show evidence for UI e↵ects through three other margins: (i) search externalities; (ii) takeup of other welfare state programs; and (iii) job separations. This suggests that the analysis of optimal UI should take a mo...

Growth, Unemployment, and Labor Market Policy *

High rates of unemployment in E.U. countries, both in historical terms and relative to those the U.S., have been a major concern for European economic policy makers since the early 90s. Since the adoption of the Lisbon Strategy in 2000, the emphasis of the discussion has shifted to focus on policy reforms designed to raise growth in the per capita GDP in the E.U. The just published Sapir Report...

Job Turnover, Unemployment and Labor Market Institutions

This paper studies the role of labor market institutions on unemployment and on the cyclical properties of job flows. We construct an intertemporal general equilibrium model with search unemployment and endogenous job turnover, and examine the consequences of introducing an unemployment benefit, a firing cost and a downward wage rigidity. The model is able to reproduce the main cyclical propert...

The Labor Market Implications of Unemployment Insurance and Short-Time Compensation