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Optimal unemployment insurance with monitoring and sanctions
Tilburg University, CentER, IZA and CEPR .
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
Tilburg University, CentER, IZA and CEPR .
2007 (English)In: Economic Journal, ISSN 0013-0133, E-ISSN 1468-0297, Vol. 117, no 518, 399-421 p.Article in journal (Refereed) Published
Abstract [en]

This article analyses the design of optimal unemployment insurance in a search equilibrium framework where search effort among the unemployed is not perfectly observable. We examine to what extent the optimal policy involves monitoring of search effort and benefit sanctions if observed search is deemed insufficient. We find that introducing monitoring and sanctions represents a welfare improvement for reasonable estimates of monitoring costs; this conclusion holds both relative to a system featuring indefinite payments of benefits and a system with a time limit on unemployment benefit receipt.

Place, publisher, year, edition, pages
2007. Vol. 117, no 518, 399-421 p.
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:uu:diva-108633DOI: 10.1111/j.1468-0297.2007.02023.xISI: 000245399000005OAI: oai:DiVA.org:uu-108633DiVA: diva2:236750
Available from: 2009-09-24 Created: 2009-09-24 Last updated: 2011-02-10Bibliographically approved

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