Hassler, JohnRodríguez Mora, José V.Storesletten, KjetilZilibotti, FabrizioUniversitat Pompeu Fabra. Departament d'Economia i Empresa2017-07-262017-07-261998-04-01http://hdl.handle.net/10230/844In 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 of human capital across agents, may choose very different unemployment insurance levels in a politico-economic equilibrium. The interaction between the political decision about the level of the unemployment insurance and the optimal search behavior of the unemployed gives rise to a self-reinforcing mechanism whichmay generate multiple steady-state equilibria. In particular, a European-type steady-state with high unemployment, low employment turnover and high insurance can co-exist with an American-type steady-state with low unemployment, high employment turnover and low unemployment insurance. A calibrated version of the model features two distinct steady-state equilibria with unemployment levels and duration rates resembling those of the U.S. and Europe, respectively.application/pdfengL'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commonsinfo:eu-repo/semantics/workingPapercomparative advantegeemploymentpolitical equilibriumsearchspecializationunemployment insuranceMacroeconomics and International Economicsinfo:eu-repo/semantics/openAccess