Optimal social insurance, incentives, and transition

Andrew Atkeson and Patrick Kehoe

No 546, Working Papers from Federal Reserve Bank of Minneapolis

Abstract: We study transition in a model in which the process of moving workers from matches in the state sector to new matches in the private sector takes time and involves uncertainty. When there are incentive problems in this rematching process, the optimal scheme may involve forced layoffs, involuntary unemployment, and a recession.

Keywords: Employment; (Economic; theory) (search for similar items in EconPapers)
Date: 1995
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmwp:546

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