Moral Hazard, Optimal Unemployment Insurance, and Experience Rating

Stephen Williamson and Cheng Wang

Working Papers from University of Iowa, Department of Economics

Abstract: This paper is concerned with evaluating alternative unemployment insurance (UI) schemes in a dynamic economy with moral hazard. We consider changes in the size and duration of UI benefits, and the effects of experience rating, and use a dynamic contracting approach to determine a benchmark optimal allocation. Radical changes in the current UI system increase welfare, but not by much. A move to full experience rating has distributional effects, but the aggregate effects are negligible.

Keywords: Moral Hazard; Unemployment Insurance (search for similar items in EconPapers)
JEL-codes: D8 J6 (search for similar items in EconPapers)
Pages: 58 pages
Date: 1999-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Related works:
Journal Article: Moral hazard, optimal unemployment insurance, and experience rating (2002)
Working Paper: Moral Hazard, Optimal Unemployment Insurance and Experience Rating (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:uia:iowaec:99-03

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