Open Access
Can welfare abuse be welfare improving?
Loading...
Files
Mazur_2016_Unemploy_PP.pdf (1.28 MB)
Embargoed until 2018, Post-print version
License
Cadmus Permanent Link
Full-text via DOI
ISBN
ISSN
0047-2727
Issue Date
Type of Publication
Keyword(s)
LC Subject Heading
Other Topic(s)
EUI Research Cluster(s)
Initial version
Published version
Succeeding version
Preceding version
Published version part
Earlier different version
Initial format
Author(s)
Citation
Journal of public economics, 2016, Vol. 141, pp. 11–28
Cite
MAZUR, Karol, Can welfare abuse be welfare improving?, Journal of public economics, 2016, Vol. 141, pp. 11–28 - https://hdl.handle.net/1814/45326
Abstract
I analyze quantitatively a model of labor search with unemployment insurance (UI), savings, voluntary quits and various labor attachment requirements. In particular, I study welfare consequences of a powerful reform giving UI entitlement to workers quitting their jobs voluntarily in order to search for another one. Results of the model calibrated to the US labor market show that there may be significant welfare gains associated with pursuing a generous entitlement policy for quitters as compared to the US status-quo. Moreover, I employ the assumption of monetary search costs and show that it can explain the empirically documented unemployed worker search behavior. Finally, by inducing different unemployment benefit eligibility requirements, the model identifies a concrete policy that could help us understand differences in the unemployment rate, match quality and income inequality between the US and Europe.
Table of Contents
Additional Information
Received 7 January 2015, Revised 29 June 2016, Accepted 1 July 2016, Available online 9 July 2016