Optimal Unemployment Benefit Policy and the Firm Productivity Distribution

Arbeitspapier

This paper provides a novel justification for a declining time profile of unemployment benefits that does not rely on moral hazard or consumption-smoothing considerations. We consider a simple search environment with homogeneous workers and low- and high-productivity firms. By introducing a declining time profile of benefits, the government can affect the equilibrium wage profile in a manner that enhances the sorting of workers across low- and high-productivity firms. We demonstrate that optimal government policy depends on the dispersion and skewness of the firms’ productivity distribution.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 5931

Classification and Topics

• Classification: Wirtschaft ; Unemployment: Models, Duration, Incidence, and Job Search ; Unemployment Insurance; Severance Pay; Plant Closings
• Subject: unemployment benefit policy ; declining unemployment benefits ; productivity distribution ; skewness ; dispersion

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Blumkin, Tomer ; Danziger, Leif ; Yashiv, Eran
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/144966
• Last update: 10.03.2025, 11:46 AM CET