Unemployment Insurance Service by staff members. The UIOP Series presents research findings and analyses dealing with unemployment insurance issues. Papers are prepared by research contractors, staff members of the unemployment insurance system, or individual researchers. Manuscripts and comments

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In this paper, I examine a model economy with production, search, and unemployment insurance. The introduction of capital into the economy of Wang and Williamson (2001) generates the result that optimal replacement ratios are always zero. The result arises from the decline in aggregate activity

Unemployment insurance exists to provide protection against the hardship that would otherwise be caused by unemployment. Unfortunately, it also distorts incentives in ways that cause inefficient increases in total unemployment. In this paper we analyze empirically a modification of the traditional

In this paper, we incorporate a positive theory of unemployment insurance into a dynamic overlapping generations model with search-matching frictions and on-the-job learning-by-doing. The model shows that societies populated by identical rational agents, but differing in the initial distribution

This paper emphasizes the two-way causality between the provision of unemployment insurance and the cultural transmission of work ethic. Values affect the size of the moral-hazard problem and, hence, the policy to be implemented. Conversely, when parents rationally choose how much effort to exert

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

This paper extends the existing literature on optimal unemployment insurance by allowing for self-insurance; individuals may save using a one-period riskless asset, but their access to the credit market is restricted. I show that under this market arrangement, an asset based unemployment insurance

I study a principal-agent problem in which the principal can obtain additional costly information about the agent’s effort. I analyze this problem in the context of optimal unemployment insurance a la Hopenhayn and Nicolini (1997), where job-search effort is private information. I calibrate

We present evidence that fraudulent collection of unemployment benefits by work-ers who are gainfully employed is the most relevant incentive problem for the de-sign of unemployment insurance. We show how to efficiently use a combination of tax/subsidy and monitoring to prevent such fraud