Optimal unemployment insurance requirements

Arbeitspapier

In the US, workers must satisfy two requirements to receive unemployment insurance (UI): a tenure requirement of a minimum work spell and a monetary requirement of a past minimum earnings. Using discontinuity of UI rules at state borders, we find that the monetary requirement decreases the number of employers and the share of part-time workers, while the tenure requirement has the opposite effect. In a quantitative model, the monetary requirement induce workers to search longer because low paying jobs are not covered by UI. Since it mitigates moral hazard, the optimal UI design has a high monetary requirement.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. WP 2022-45

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Policy Objectives; Policy Designs and Consistency; Policy Coordination ; Unemployment Insurance; Severance Pay; Plant Closings
• Subject: Unemployment Insurance ; UI Eligibility ; Optimal UI

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): De Souza, Gustavo ; Luduvice, André Victor Doherty
• Event: Veröffentlichung
• (who): Federal Reserve Bank of Chicago
• (where): Chicago, IL
• (when): 2022

Further information

• DOI: doi:10.21033/wp-2022-45
• Handle: http://hdl.handle.net/10419/267999
• Last update: 10.03.2025, 11:41 AM CET