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Optimal Unemployment Benefit Policy And The Firm Productivity Distribution

Author

Listed:
  • Tomer Blumkin

    (BGU)

  • Leif Danziger

    (BGU)

  • Eran Yashiv

    (The Eitan Berglas School of Economics, Tel-Aviv University, Israel)

Abstract

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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Tomer Blumkin & Leif Danziger & Eran Yashiv, 2015. "Optimal Unemployment Benefit Policy And The Firm Productivity Distribution," Working Papers 1508, Ben-Gurion University of the Negev, Department of Economics.
    • Handle: RePEc:bgu:wpaper:1508
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Unemployment benefit policy; declining unemployment benefits; productivity distribution; skewness; dispersion;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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