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This article considers optimal unemployment insurance (UI) in an equilibrium matching framework where wages are determined by strategic bargaining. It compares the outcome with the standard Nash bargaining approach, which can be interpreted as union wage bargaining with an insider/outsider distortion. It also shows that a coordinated policy approach, one that chooses job creation subsidies and UI optimally, generates a much greater welfare gain than a policy that simply varies UI payments by duration.

In this paper, we report the results of the only field test of which we are aware that uses randomized trials to measure whether stricter enforcement and verification of work search behavior alone decreases unemployment claims and benefits paid in the U.S. unemployment insurance (UI) program. These experiments, which were implemented in four U.S. sites in Connecticut, Massachusetts, Virginia and Tennessee, were designed to explicitly test claims based on nonexperimental data, summarized in Burgess and Kingston (An Incentives Approach to Improving the Unemployment Compensation System, W.E. Upjohn Institute for Employment Research, 1987), that a prime cause of overpayments is the failure of claimants to actively seek work. Our results provide no support for the view that the failure to actively search for work has been a cause of overpayment in the UI system. Keywords: Unemployment insurance; Randomized experiments; Work search verification

We use a flexible hazard rate model with unrestricted spell duration and calendar time effects to analyse a dataset including all Norwegian unemployment spells during the 1990s. The dataset provides a unique access to conditionally independent variation in unemployment compensation. We find that a marginal increase in compensation reduces the escape rate from unemployment significantly, irrespective of business cycle conditions and spell duration. The escape rate rises sharply in the months just prior to benefit exhaustion. While men are more responsive than women with respect to marginal changes in compensation, women are most responsive with respect to benefit exhaustion.

Byline: Brian Bell (1), Richard Blundell (2), John Van Reenen (3) Keywords: programme evaluation; wages; difference in differences Abstract: This paper examines alternative approaches to wage subsidy programmes. It does this in the context of a recent active labour market reform for the young unemployed in Britain. This 'New Deal' reform and the characteristics of the target group are examined in detail. We discuss theoretical considerations, the existing empirical evidence and propose two strategies for evaluation. The first suggests an ex-post 'trend adjusted difference in difference' estimator. The second, relates to a model based ex-ante evaluation. We present the conditions for each to provide a reliable evaluation and fit some of the crucial parameters using data from the British Labour Force Survey. We stress that the success of this type of labour market programmes hinge on dynamic aspects of the youth labour market, in particular the pay-off to experience and training. Author Affiliation: (1) Tudor Proprietary Trading LLC, UK (2) Institute for Fiscal Studies, University College London and, UK (3) UC Berkeley, Institute for Fiscal Studies, University College London and CEPR, UK Article History: Registration Date: 29/09/2004

Unemployment compensation insurance systems may be reformed so that it would better serve the interests of businesses and employees alike. Letting market processes take over unemployment insurance would result in a less costly and more reliable income security programs if allowed to work. Market forces could also shape a system that is more equitable to all parties concerned and not just laid-off employees.

The back-to-back recessions of the early 1980's drove Illinois and most other states deep into debt to the Federal government for their unemployment insurance systems. As part of the process of debt repayment, Illinois created a model of the state's unemployment insurance (UI) system to analyze legislation geared to debt repayment. This paper describes Illinois' UI forecasting model, and examines two uses of the model for UI system evaluation. Illinois' system is found to be solvent, as it accumulates little or no debt over severe business cycles and repays debt automatically. It is also found to be counter-cyclical, as benefits increase during recessions, and tax rates tend to increase at times of low unemployment.

This article examines government support for the unemployed and their families in the European Union and attempts to demonstrate why the debate concerning the adequacy of unemployment benefit is based on a partial understanding of the income packages available to the unemployed. Conventional methods of assessing the standard of unemployment insurance have focused on the benefits available to a single head of household rather than the resources available to both the unemployed and their families. We argue that the manner in which unemployment benefit is supplemented by family allowances and housing benefit makes a significant difference to household income. Our results have important implications for our theoretical understanding of welfare state regimes, and, in particular the evaluation of the extent to which income-maintenance systems free individuals from the need to participate in the labour market in order to be assured of economic security. We argue that the procedure adopted by Esping-Andersen in The Three Worlds of Welfare Capitalism (1990) to measure this process of de-commodification does not take account of the experience of the unemployed and their families, and we use our results to construct a revised and expanded index of de-commodification which provides us with a clearer impression of each country's characteristics., In most European countries unemployment is at its highest level since the beginning of the 1990s, and is at the forefront of the European Union's (EU) political agenda. As a [...]

INTRODUCTION Unemployment is a social construct which solves the problem of uncertainty in the employment relationship. There are alternative solutions. A system of flexible prices, wages, and profits is one [...]

SINCE BECOMING responsible for a national Unemployment Insurance (UI) revenue forecasting model in September 1992, I have been involved in shaping a new attitude and perspective toward UI. As an [...]

The following was delivered by the author to the High Level American Meeting of Experts on The Challenges of Social Reform and New Administrative and Financial Management Techniques. The meeting, [...]

The relationship between the maximum allowed duration of unemployment benefits and the duration of receipt of such benefits is examined. The effect of policy changes in New Jersey are assessed.

The Canadian experience of increased unemployment benefits dating from 1971 is evaluated. Its effects on the likelihood of collecting benefit are explored and the links with disincentives to work are discussed.

The effects of unemployment benefits on subsequent job quality are investigated by differentiating between transitions from unemployment to correctly allocated jobs and to over-education. It was observed that reforming the unemployment compensation system by reducing unemployment benefits would not only shorten the average unemployment duration but also increase the incidence of over-education, and thus reduce the overall job match quality in the labour market.

The employers cut unemployment insurance costs by giving the work to temporary staffing agencies, displacing the price of unemployment to temporary staffing agencies and their workers. Outsourcing decreases costs of on site employers while increasing the labor market turbulence even in times of economic growth.

LEAH E. MARCAL [*] The federal Trade Adjustment Assistance (TAA) program was designed to aid workers who have lost their jobs because of increased import competition. Linear earnings functions provide [...]

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 significantly changed the nature of income support for poor families in the United States with the elimination of Aid to [...]