Optimal Unemployment Insurance with Variable Skill Levels

Andreas Pollak

Journal of Institutional and Theoretical Economics (JITE), 2008, vol. 164, issue 4, 696-726

Abstract: I study the consequences of heterogeneity of skills for efficient unemployment insurance design, using a principal-agent setup. Agents' wages depend on individual productivity and the quality of the worker-firm match. Productivity declines during unemployment and increases on the job. For plausible parameter constellations, more productive agents experience shorter unemployment durations and higher productivity growth under the optimal contract. Benefits do not only depend on employment histories, but also on the skills reported by the agent. Agents are rewarded for accepting jobs that are in line with the insurer's expectations, meaning that agents typically consume more if they find better jobs.

JEL-codes: C61 D78 J24 J31 J65 J78 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mohrsiebeck.com/en/article/optimal-une ... 28093245608786534659 (text/html)
Fulltext access is included for subscribers to the printed version.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mhr:jinste:urn:sici:0932-4569(200812)164:4_696:ouiwvs_2.0.tx_2-q

Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany

Access Statistics for this article

Journal of Institutional and Theoretical Economics (JITE) is currently edited by Gerd Mühlheußer and Bayer, Ralph-C

More articles in Journal of Institutional and Theoretical Economics (JITE) from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().