The elasticity of the unemployment rate with respect to benefits

Kai Christoffel and Keith Kuester

Economics Letters, 2009, vol. 102, issue 2, 102-105

Abstract: Calibrated to replicate unemployment fluctuations, the standard Mortensen-Pissarides model implies that unemployment rises too strongly when benefits increase. Under an alternative bargaining assumption (right-to-manage) the model matches unemployment fluctuations, and implies a reasonable elasticity of unemployment with respect to benefits.

Keywords: Real; business; cycles; Bargaining; Structural; reforms; Unemployment; insurance (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:102:y:2009:i:2:p:102-105

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