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dc.contributor.authorTASKIN, Temel
dc.date.accessioned2011-10-21T09:48:26Z
dc.date.available2011-10-21T09:48:26Z
dc.date.issued2011-01-01
dc.identifier.issn1830-7728
dc.identifier.urihttp://hdl.handle.net/1814/18894
dc.descriptionThis paper is a part of the author's Ph.D. thesis at the University of Rochester.en
dc.description.abstractIn this paper, we incorporate home production into a quantitative model of unemployment and show that realistic levels of home production have a significant impact on the optimal unemployment insurance rate. Motivated by recently documented empirical facts, we augment an incomplete markets model of unemployment with a home production technology, which allows unemployed workers to use their extra non-market time as partial insurance against the drop in income due to unemployment. In the benchmark model, we find that the optimal replacement rate in the presence of home production is roughly 40% of wages, which is 40% lower than the no home production model’s optimal replacement rate of 65%. The 40% optimal rate is also close to the estimated rate in practice. The fact that home production makes a significant difference in the optimal unemployment insurance rate is robust to a variety of parameterizations and alternative model environments.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.relation.ispartofseriesEUI MWPen
dc.relation.ispartofseries2011/29en
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectD13en
dc.subjectE21en
dc.subjectJ65en
dc.titleUnemployment Insurance and Home Productionen
dc.typeWorking Paperen
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