This paper argues that a risk-averse worker’s after-tax reservation wage encodes all the relevant information about her welfare. This insight leads to a novel test for the optimality of unemployment insurance based on the responsiveness of reservation wages to unemployment benefits. Some existing

In recent years researchers have paid increasing attention to the impact of the unemployment insurance system on various labor market phe-nomena. Two strands of research in this area can be distinguished. In the first, researchers have been concerned with the influence of unemploy-

Employment that is not covered by state unemployment insurance laws

Search frictions, real wage rigidities and the optimal design of unemployment insurance

Compensation Program. The program has two main objectives: 1) to provide temporary and partial wage replacement to involuntarily unemployed

Speaking truth about policy targets: The intersection of race and gender in the

out the impact of hidden savings on optimal

(ii) development of

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A hallmark of modern labor economics is the close interplay between the development of theory, data sources and econometric testing. The evolution of the economic analysis of unemployment insurance provides a good illustration. New theoretical approaches, in particular job-search theory, have