Understanding the welfare effects of unemployment insurance policy in general equilibrium

Toshihiko Mukoyama

Journal of Macroeconomics, 2013, vol. 38, issue PB, 347-368

Abstract: This paper analyzes the welfare effects of unemployment insurance reforms in a general equilibrium incomplete market model. In particular, it decomposes the total welfare effect for each individual into different factors. I consider a model where the consumers face an uninsurable unemployment risk, can save in an interest-bearing asset, and are subject to a borrowing constraint. The labor market is modeled using a Diamond–Mortensen–Pissarides style search and matching model. The decomposition exercises reveal how each factor contributes to the heterogeneity of welfare effects among different consumers.

Keywords: Welfare effect; Unemployment insurance; Heterogeneous agents (search for similar items in EconPapers)
JEL-codes: E24 E62 H30 J65 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (19)

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Related works:
Working Paper: Understanding the Welfare Effects of Unemployment Insurance Policy in General Equilibrium (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:38:y:2013:i:pb:p:347-368

DOI: 10.1016/j.jmacro.2013.08.022

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