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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

This paper develops a theory of optimal unemployment insurance

We investigate the design of an optimal Unemployment Insurance program using an equilibrium search and matching model calibrated using data from the reemployment bonus experiments and secondary sources. We examine (a) the optimal potential duration of UI benefits, (b) the optimal UI replacement

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In this paper, we investigate the design of optimal unemployment insurance in an environment with moral hazard and cyclical fluctuations. The optimal unemployment insurance contract balances the insurance motive to provide consumption for the un-employed with the provision of incentives to search

This paper analyzes the design of optimal unemployment insurance in a search equilibrium framework where search e¤ort among the unemployed is not perfectly observable. We examine to what extent the optimal policy involves monitoring of search e¤ort and bene…t sanctions if observed search is deemed

Fields and the referees for helpful comments. My recent work on this topic has been funded by

This paper studies the optimal unemployment insurance for older workers in a repeated principal-agent model, where the search intensity of risk-averse workers (the agents) is not observed by the risk-neutral insurance agency (the principal). When unemployment benefits are the only available tool

, and endogenous search effort among the unemployed. The main result is that an optimal insurance program implies a declining benefit sequence over the spell of unemployment. Numerical calibrations of the model suggest that there may be non-trivial welfare gains associated with switching from an optimal uniform