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Optimal unemployment insurance in a matching equilibrium

Optimal unemployment insurance in a matching equilibrium

Authors :
Coles, Melvyn
Masters, Adrian
Source :
Journal of Labor Economics. Jan, 2006, Vol. 24 Issue 1, p109, 30 p.
Publication Year :
2006

Abstract

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.

Details

Language :
English
ISSN :
0734306X
Volume :
24
Issue :
1
Database :
Gale General OneFile
Journal :
Journal of Labor Economics
Publication Type :
Academic Journal
Accession number :
edsgcl.141494731