Optimal Unemployment Insurance with Monitoring and Sanctions

Bertil Holmlund (), Jan van Ours, Jan Boone and Peter Fredriksson

No 3082, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper analyses the design of optimal unemployment insurance in a search equilibrium framework where search effort among the unemployed is not perfectly observable. We examine to what extent the optimal policy involves monitoring of search effort and benefit sanctions if observed search is deemed insufficient. We find that introducing monitoring and sanctions represents a welfare improvement for reasonable estimates of monitoring costs; this conclusion holds both relative to a system featuring indefinite payments of benefits and a system with a time limit on unemployment benefit receipt. The optimal sanction rates implied by our calibrated model are much higher than the sanction rates typically observed in European labour markets

Keywords: Unemployment insurance; Search; Sanctions (search for similar items in EconPapers)
JEL-codes: J64 J65 J68 (search for similar items in EconPapers)
Date: 2001-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Related works:
Journal Article: Optimal Unemployment Insurance with Monitoring and Sanctions (2007)
Working Paper: Optimal unemployment insurance with monitoring and sanctions (2007)
Working Paper: Optimal unemployment insurance with monitoring and sanctions (2002)
Working Paper: Optimal Unemployment Insurance with Monitoring and Sanctions (2001)
Working Paper: Optimal Unemployment Insurance with Monitoring and Sanctions (2001)
Working Paper: Optimal Unemployment Insurance with Monitoring and Sanctions (2001)
Working Paper: Optimal Unemployment Insurance with Monitoring and Sanctions (2001)
Working Paper: Optimal Unemployment Insurance with Monitoring and Sanctions (2001)
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