Business cycle dependent unemployment insurance

Torben M. Andersen and Michael Svarer ()

No 1498, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The consequences of cylical contingencies in unemployment insurance systems are considered in a search-matching model allowing for shifts between "good" and "bad" states of nature. An argument for state contingencies is that insurance arguments are stronger and incentive effects weaker in bad than in good states of nature. We con.rm this and show that cyclically dependent benefit levels not only provide better insurance but may have structural effects implying that the structural (average) unemployment rate decreases, although the variability of unemployment may increase.

Date: 2009
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Related works:
Working Paper: Business Cycle Dependent Unemployment Insurance (2010)
Working Paper: Business Cycle Dependent Unemployment Insurance (2010)
Working Paper: Business Cycle Dependent Unemployment Insurance (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1498

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