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| Author: | Acemoglu, D. Shimer, R. |
| Title: | Productivity gains from unemployment insurance |
| Journal: | European Economic Review
2000 : JUN, VOL. 44:7, p. 1195-1224 |
| Index terms: | Efficiency Unemployment Insurance Consumption Labour markets Models USA |
| Language: | eng |
| Abstract: | This paper argues that unemployment insurance increases labour productivity by encouraging workers to seek higher productivity jobs, and by encouraging firms to create those jobs. There is a quantitative model used to investigate whether this effect is comparable in magnitude to the standard moral hazard effects of unemployment insurance. This paper's model economy captures the behaviour of the U.S. labour market for high school graduates quite well. With unemployment insurance more generous than the current U.S. level, unemployment would increase by a magnitude similar to the micro-estimates; but because the composition of jobs also changes, total output and welfare would increase as well. |
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