Unemployment insurance with endogenous search intensity and precautionary saving

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Costain, James. Unemployment insurance with endogenous search intensity and precautionary saving. 1997
http://hdl.handle.net/10230/1134
To cite or link this document: http://hdl.handle.net/10230/1134
dc.contributor.author Costain, James
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
dc.date.issued 1997-11-01
dc.identifier.uri http://hdl.handle.net/10230/1134
dc.description.abstract A welfare analysis of unemployment insurance (UI) is performed in a general equilibrium job search model. Finitely-lived, risk-averse workers smooth consumption over time by accumulating assets, choose search effort when unemployed, and suffer disutility from work. Firms hire workers, purchase capital, and pay taxes to finance worker benefits; their equity is the asset accumulated by workers. A matching function relates unemployment, hiring expenditure, and search effort to the formation of jobs. The model is calibrated to US data; the parameters relating job search effort to the probability of job finding are chosen to match microeconomic studies of unemployment spells. Under logarithmic utility, numerical simulation shows rather small welfare gains from UI. Even without UI, workers smooth consumption effectively through asset accumulation. Greater risk aversion leads to substantially larger welfare gains from UI; however, even in this case much of its welfare impact is due not to consumption smoothing effects, but rather to decreased work disutility, or to a variety of externalities.
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 243
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.title Unemployment insurance with endogenous search intensity and precautionary saving
dc.type info:eu-repo/semantics/workingPaper
dc.date.modified 2014-06-03T07:13:55Z
dc.subject.keyword Macroeconomics and International Economics
dc.subject.keyword unemployment insurance
dc.subject.keyword matching
dc.subject.keyword search effort
dc.subject.keyword moral hazard
dc.subject.keyword precautionary saving
dc.subject.keyword prudence
dc.subject.keyword life cycle
dc.rights.accessRights info:eu-repo/semantics/openAccess


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