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Re-entitlement Effects with Duration Dependent Unemployment Insurance in a Stochastic Matching Equilibrium

Coles, M and Masters, A (2006) Re-entitlement Effects with Duration Dependent Unemployment Insurance in a Stochastic Matching Equilibrium. UNSPECIFIED. Society for Economic Dynamics 2006 Meeting Papers 189.

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Abstract

In the context of a standard equilibrium matching framework, this paper considers how a duration dependent unemployment insurance (UI) system affects the dynamics of unemployment and wages in an economy subject to stochastic job-destruction shocks. It establishes that re-entitlement effects induced by a finite duration UI program generate intertemporal transfers from firms that hire in future booms to firms that hire in current recessions. These transfers imply a net hiring subsidy in recessions which stabilizes unemployment levels over the cycle

Item Type: Monograph (UNSPECIFIED)
Uncontrolled Keywords: Matching frictions; Unemployment; Duration Dependent UI
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 05 Jan 2013 19:18
Last Modified: 17 Aug 2017 18:04
URI: http://repository.essex.ac.uk/id/eprint/4906

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