The Starting Points
Chapter Chapter 2 in Modelling Unemployment Insurance, 2022, pp 7-13 from Springer
Abstract The chapter briefly considers the starting constructions of Baily, Shavell and Weiss, and Mortensen, which in the second half of the 1970s provided a formal treatment of basic aspects of the UI problem: the optimal level of UI benefits; the time profile of an optimal UI scheme; and job search decisions in the presence of a given scheme of unemployment insurance. Within analytical frameworks designed for different purposes, the adverse incentives of UI benefits are addressed in the models. The analytical results achieved by these authors are a constant reference for all subsequent work on optimal UI social programs. Sketching out these starting points, in a necessarily summary manner, is an appropriate step in effectively framing the analytical developments over those basic aspects of the theme.
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