Modelling Unemployment Insurance in the Real World

Spencer Cooper-Ohm and Nicholas Trachter
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Spencer Cooper-Ohm: https://www.richmondfed.org/research/people/cooper-ohm

Richmond Fed Economic Brief, 2026, vol. 26, issue 16

Abstract: We create an economic model of unemployment insurance designed to accurately capture the life cycle of workers. A socially optimal unemployment insurance program would replace 63 percent of a worker’s income for six months after termination. This result bridges the previous disagreement between partial and general equilibrium models of unemployment insurance.

Keywords: Employment; and; labor; markets (search for similar items in EconPapers)
Date: 2026
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