Re-entitlement E¤ects with Duration Dependent Unemployment Insurance in a Stochastic Matching Equilibrium

نویسنده

  • Melvyn Coles
چکیده

In the context of a standard equilibrium matching framework, this paper considers how a duration dependent unemployment insurance (UI) system affects the dynamics of unemployment and wages in an economy subject to stochastic job-destruction shocks. It establishes that re-entitlement e¤ects induced by a …nite duration UI program generate intertemporal transfers from …rms that hire in future booms to …rms that hire in current recessions. These transfers imply a net hiring subsidy in recessions which stabilizes unemployment levels

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تاریخ انتشار 2006