The Unemployed Individual's Marginal Willingness to Pay for the Remaining Entitlement Period

Jos van Ommeren ()

LABOUR, 2003, vol. 17, issue 2, 271-283

Abstract: Abstract. This paper introduces a method of estimating the unemployed individual's marginal willingness to pay for the remaining entitlement period by application of search theory. It is demonstrated that search theory implies that the unemployed individual's marginal willingness to pay for the remaining entitlement period must be less than the value of the unemployment benefit. When benefits expire, though, the willingness to pay for an additional period must be equal to the benefit received during that period. The empirical relevance of this method is shown by re‐interpreting the studies of Meyer (Econometrica 58: 757–782, 1990) and Katz and Meyer (Journal of Public Economics 41: 45–72, 1990).

Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:bla:labour:v:17:y:2003:i:2:p:271-283

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