Corpus ID: 1899524

Optimal Unemployment Insurance Over the Business Cycle

@article{Landais2010OptimalUI,
  title={Optimal Unemployment Insurance Over the Business Cycle},
  author={Camille Landais and Pascal Michaillat and Emmanuel Saez},
  journal={Political Economy: Government Expenditures \& Related Policies eJournal},
  year={2010}
}
This paper analyzes optimal unemployment insurance over the business cycle in a search model in which unemployment stems from matching frictions (in booms) and job rationing (in recessions). Job rationing during recessions introduces two novel effects ignored in previous studies of optimal unemployment insurance. First, job-search efforts have little effect on aggregate unemployment because the number of jobs available is limited, independently of matching frictions. Second, while job-search… Expand
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