are more exports always better comparing cash and in kind export subsidies cash and in kind export subsidies are compared it is found that the ability to enhance real farm income via export subsidies is sensitive both to the form cash vs in kind and the point of policy intervention in kind subsidies of the type granted under the export enhancement program can in fact reduce real farm income export subsidies are examined under three separate scenarios no target price or nonrecourse loan programs a target price but no nonrecourse loan program and a nonrecourse loan program but no target price program the presence of a nonrecourse loan program dampens the impacts of both cash and in kind export subsidies before the introduction of the export enhancement program eep two types of export subsidies had been used by the united states a direct cash subsidy for wheat exports and an export payment in kind pik for feed grains cotton rice and nonfat dry milk under the original export pik program exporters showing proof of export sales were given certificates redeemable for commodity credit corporation ccc commodities to be exported cochrane and ryan the eep reintroduced in kind export subsidies in 1985 this paper compares the relative effectiveness of cash and pik export subsidies in increasing agricultural exports real prices and real incomes because agricultural policy ultimately must be judged by how it affects agriculture s relative position in the economy the framework is general equilibrium the model considers the interplay between farmers international middlemen nonfarm producers domestic consumers and foreign consumers the analysis shows that the ability to enhance real farm income is sensitive both to the form cash subsidies versus pik subsidies and point of policy intervention at the farm or export level in particular the results demonstrate that pik subsidies of the type granted under the eep can decrease real farm income from production agriculture s perspective an export pik program even though it raises total agricultural exports is not a sure path to improving agriculture s position in the general economy sometimes less exports are better we first introduce the model the second section reexamines solely for comparative purposes the consequences of introducing cash subsidies to commercial exporters the third section examines in kind export subsidies given to farmers and the fourth considers in kind subsidies to commercial traders the fifth section reexamines these results when the real target price of the agricultural good is fixed next tied pik export subsidies are considered finally the effects of contemporaneous existence of pricesupport operations on the results are discussed

the impact of unemployment insurance on job search evidence from google search data job search is a key choice variable in theories of labor markets but is difficult to measure directly we develop a job search activity index based on google search data the google job search index gjsi we validate the gjsi with both survey and web based measures of job search unlike those measures the gjsi is high frequency geographically precise and available in real time we demonstrate the gjsi s utility by using it to study the effects of unemployment insurance policy changes between 2008 and 2014 we find no evidence of an economically meaningful effect of these changes on aggregate search

unemployment insurance and the rate of re employment of displaced workers the rate of transition from unemployment to re employment for a sample of displaced workers is estimated using a semiparametric specification which allows the effects of unemployment insurance benefits to vary over time three results which would be missed by more restrictive specifications demonstrate the value of this approach 1 the effects of ui benefits decline and eventually disappear as the date of expiration approaches 2 expiration of ui benefits are an inadequate explanation of the spikes commonly observed in nonparametric sample hazard rates for re employment 3 ui benefits do not significantly affect the rate at which a displaced worker becomes re employed in his or her previous industry but reduce the rate for transitions to other industries copyright 1991 by mit press

the long term effects of job search requirements evidence from the uk jsa reform this paper investigates long term returns from unemployment compensation exploiting variation from the uk jsa reform of 1996 which implied a major increase in job search requirements for eligibility and in the related administrative hurdle search theory predicts that such changes should raise the proportion of non claimant nonemployed with consequences on search effort and labor market attachment and lower the reservation wage of the unemployed with negative effects on post unemployment wages i test these ideas on longitudinal data from social security records llmdb using a difference in differences approach i find that individuals who start an unemployment spell soon after jsa introduction as opposed to six months earlier are 2 5 3 more likely to move from unemployment into incapacity benefits spells and 4 5 less likely to have positive earnings in the following year this latter employment effect only vanishes four years after the initial unemployment shock also annual earnings for the treated individuals are lower than for the non treated these results suggest that while tighter search requirements were successful in moving individuals off unemployment benefits they were not successful in moving them onto long lasting or better jobs with fairly long lasting unintended consequences on a number of labor market outcomes

how do different entitlements to unemployment benefits affect the transitions from unemployment into employment abstract in portugal duration of benefits is exclusively age determined while replacement rates are essentially uniform we exploit differences in potential maximum duration of benefits for nearly matched pairs of individuals to determine the effects of benefit duration on job finding

job search and unemployment insurance new evidence from time use data article i nfo this paper provides new evidence on job search intensity of the unemployed in the u s modeling job search intensity as time allocated to job search activities the major findings are 1 the average u s unemployed worker devotes about 41 min to job search on weekdays which is substantially more than their european counterparts 2 workers who expect to be recalled by their previous employer search substantially less than the average unemployed worker 3 across the 50 states and d c job search is inversely related to the generosity of unemployment benefits with an elasticity between 1 6 and 2 2 4 job search intensity for those eligible for unemployment insurance ui increases prior to benefit exhaustion and 5 time devoted to job search is fairly constant regardless of unemployment duration for those who are ineligible for ui

standing and survival in the adult film industry abstractit is conventional wisdom that knowing the right people is essential for one s career this claim is supported in the literature on social capital however the empirical evidence in this field remains ambiguous while the literature recognizes that connections help finding any job at all it remains unclear if long term benefits exist in contrast to other industries collaborations between performers in adult films are easily observed consequently a collaborative network can be constructed which serves as an input in order to estimate the effect of a person s centrality on individual success unfortunately success is not easily observed either hence in this manuscript the survival in the industry is used as a proxy for professional success this assumption is justified by the economic argument that in the absence of lock in effects performers will remain in the industry as long as it remains profitable the profitability does not only depend on monetary aspects but also includes costs

the impact of agricultural subsidies on global welfare increasing global nature of the world economy have sparked much debate as to whether globalization is a vehicle for growth and development or a bane to society the debate is not simply one between the informed and the uneducated some of the most respected economists in the world disagree as to the impacts of globalization stiglitz 2002 refers to the devastating effect that globalization can have on developing countries on the other hand bhagwati 2004 holds that globalization can be beneficial for both developed and developing countries he postulates that for this to occur there must be a set of new policies and institutions that will help developing countries handle increased volatilities result

the impact of the potential duration of unemployment benefits on the duration of unemployment abstract this paper examines the impact of the potential duration of unemployment insurance ui benefits on unemployment in the united states first we use a large sample of household heads to examine differences in the unemployment spell distributions of ui recipients and nonrecipients sharp increases in the escape rate from unemployment both through recalls and new job acceptances are apparent for ui recipients around the time of benefits exhaustion such increases are not apparent at similar points of spell duration for nonrecipients second our analysis of accurate administrative data from 12 states indicates that a one week increase in potential benefit duration increases the average duration of the unemployment spells of ui recipients by 0 16 to 0 20 weeks

the cost effectiveness of the u s export enhancement program bonus allocation mechanism the u s export enhancement program is evaluated from the perspective of the cost effectiveness of its bonus allocation mechanism the current mechanism resembles a discriminatory price common value auction however auction theory suggests that a discriminatory auction may not be optimal in this setting for several reasons this article evaluates the current format relative to an alternative uniform price auction estimation results reveal evidence of strategic bidder behavior under the current format and simulations suggest that adopting a uniform price auction format for bonus allocation may yield considerable savings to the treasury by eliminating incentives to pad bids and increasing participation in the auction

unemployment insurance recall expectations and unemployment outcomes this paper empirically examines the importance of explicitly accounting for the layoff rehire process in the analysis of unemployment outcomes in the united states we find that the spells of individuals who initially expect to be recalled account for much more of the unemployment of unemployment insurance ui recipients than do spells actually ending in recall our results indicate that the recall and new job escape rates from unemployment have quite different time patterns and are often affected in opposite ways by explanatory variables we also find that the probability of leaving unemployment both through recalls and new job finding increases greatly around the time that ui benefits lapse over the past fifteen years many studies have empirically analyzed the determinants of individual unemployment spell durations in the united states much of this literature has used a job search framework in which the unemployed are viewed as permanently displaced workers who are unattached to jobs the possibility of recall to a former job a process not requiring search has been omitted from explicit consideration in the majority of these studies 2 an explicit treatment of the layoff rehire process is necessary for a proper understanding of the determinants of unemployment durations and of the impacts of unemployment policies in the united states for at least three reasons first temporary layoffs in which workers are often rehired by their original employers are a quantitatively quite important feature of the u s labor market 3 second expectations concerning the likelihood of recall are likely to affect the responses of employers and unemployed workers to labor market interventions such as reemployment bonuses and subsidies

rethinking social insurance economics 1 social insurance programs have become the most important the most expensive and often the most controversial aspect of government domestic policy not only in the united states but also in many other countries including developing and industrialized nations in the united states these programs include social security retirement disability and survivor insurance unemployment insurance and medicare insurance for those age 65 and older together these programs accounted for 37 percent of federal government spending and more than 7 percent of gdp in 2003 these ratios have increased rapidly in the past and are projected to increase even faster in the future because of the more rapid aging of the population i will discuss how the major forms of social

temporary disability and economic incentives we investigate the impacts of economic incentives on the duration and outcome of temporary disability insurance tdi spells the analysis is based on a large quasi experiment taking place in norway involving a complete overhaul of the tdi benefit system our findings show that the labour supply of tdi claimants does respond to both the benefit level and the level of local labour demand the estimated elasticity of the transition rate to employment with respect to the benefit level is 0 33 we also find that the tdi benefit level significantly affects the transition rate to alternative social insurance programmes

targeted agricultural export subsidies and social welfare global export subsidies are known to be welfare reducing this paper demonstrates that a small targeted subsidy can increase the welfare of the subsidizing country by exploiting differences in excess demand elasticities targeted export subsidies can also increase the subsidizing country s welfare by exploiting transportation cost differences excess supply elasticities of competitors or excess demand elasticities of markets supplied by competitors when markets are shared an empirical model of the world wheat market illustrates the theoretical conclusions an optimal targeted subsidy scheme causes a small increase in u s welfare but with major disruptions in world trade flows

surplus maximization and optimality i identify assumptions under which policies that maximize expected surplus are pareto optimal even when expected consumer surplus does not even locally represent preferences over price income lotteries besides the oft made partial equilibrium assumptions that only one price varies and that income changes do not aect demand the two other assumptions are that every consumer s indirect utility function is supermodular in price and income and policies order prices by a single crossing property supermodularity holds precisely if relative risk aversion exceeds the income elasticity of demand a mild condition the single crossing property appears strong but holds in many applications that use expected surplus

the effects of extended unemployment insurance over the business cycle evidence from regression discontinuity estimates over 20 years one goal of extending the duration of unemployment insurance ui in recessions is to increase ui coverage in the face of longer unemployment spells although it is a common concern that such extensions may themselves raise nonemployment durations it is not known how recessions would affect the magnitude of this moral hazard to obtain causal estimates of the differential effects of ui in booms and recessions this article exploits the fact that in germany potential ui benefit duration is a function of exact age which is itself invariant over the business cycle we implement a regression discontinuity design separately for 20 years and correlate our estimates with measures of the business cycle we find that the nonemployment effects of a month of additional ui benefits are at best somewhat declining in recessions yet the ui exhaustion rate and therefore the additional coverage provided by ui extensions rises substantially during a downturn the ratio of these two effects represents the nonemployment response of workers weighted by the probability of being affected by ui extensions hence our results imply that the effective moral hazard effect of ui extensions is significantly lower in recessions than in booms using a model of job search with liquidity constraints we also find that in the absence of market wide effects the net social benefits from ui extensions can be expressed either directly in terms of the exhaustion rate and the nonemployment effect of ui durations or as a declining function of our measure of effective moral hazard copyright 2012 oxford university press

labor market effects of unemployment insurance design with the emergence of the great recession unemployment insurance ui is once again at the heart of the policy debate in this paper we review the recent theoretical and empirical evidence on the labor market effects of ui design we also discuss policy issues related to ui design including the structure of benefits the role of liquidity constraints and the pros and cons of a ui system in which the generosity of ui benefits is varying over the business cycle finally we identify potential areas of future research

search and nonwage job characteristics this paper quantifies the importance of nonwage job characteristics to workers by estimating a structural on the job search model the model generalizes the standard search framework by allowing workers to search for jobs based on both wages and job specific nonwage utility flows within the structure of the search model data on accepted wages and wage changes at job transitions identify the importance of nonwage utility through revealed preference the estimates reveal that utility from nonwage job characteristics plays an important role in determining job mobility the value of jobs to workers and the gains from job search

a note on small income effects this note provides an alternative sufficient condition for the small income effect result that is first shown by vives small income effects a marshallian theory of consumer surplus and downward sloping demand rev econ stud 54 1 1987 87 103 the condition is stated by ordinal terms only whereas vives assumes cardinal properties of utility representation second as its application we provide a sufficient condition for the preference being asymptotically quasi linear in a two good economy where the second good is a composition of a large number of goods

cash on hand and the duration of job search quasi experimental evidence from norway we investigate the causal eect of lump sum severance payments on job search duration in norway identi cation is achieved by exploiting dis continuities in the available amounts along the age and time dimensions the results can be interpreted as evidence of liquidity constraints thus suggesting that in the spirit of the baily chetty model of optimal unem ployment insurance current bene ts are too low since norway has one of the most equitable wealth distributions and one of the most generous ui systems of all oecd economies this suggests that liquidity constraints are likely to matter also in other oecd economies

unemployment insurance in welfare states the impacts of soft duration constraints based on a major reform of norwegian unemployment insurance ui we examine the behavioral impacts of soft and hard ui duration constraints a constraint is interpreted as hard if a claimant cannot rely on any form of income support after exhaustion and as soft if ui is replaced by follow on benefits or participation in active labor market programs almp we find that both hard and soft constraints raise the job hazard significantly with surprisingly similar spikes at ui exhaustion participation in almp raises the probability of eventually finding a job but at the cost of lengthening the overall job search period

can welfare abuse be welfare improving 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

price discrimination in the context of vertical differentiation an application to canadian wheat exports this study examines the ability of the canadian wheat board cwb to price discriminate in bread wheat exports this study models wheat as a vertically differentiated intermediate good and modifies the model of vertical differentiation by mussa and rosen to the realities of wheat import demand the conceptual model isolates the bases of price discrimination and demonstrates that the cwb s ability to exploit cost differences in pricing depends on the extent of the differentiation between canadian and u s wheat this model is implemented using monthly confidential price data provided by the cwb for exports to japan the united kingdom and two markets aggregating remaining exports through canada s west and east coasts for 1982 1994 the data indicate that the cwb charges different prices to different countries for wheat of the same grade and protein content results from the model indicate that the price difference between any two markets is not completely explained by elements of perfect competition however the evidence is mixed regarding the ability of the cwb to utilize all the instruments available to price discriminate thus the cwb s pricing strategy may be more complex and dynamic than the prescription for static producer surplus maximization derived in this study

benefit duration unemployment duration and job match quality a regression discontinuity approach summary we use a sharp discontinuity in the maximum duration of benefit entitlement to identify the effect of extended benefit duration on unemployment duration and post unemployment outcomes employment stability and re employment wages we address dynamic selection which may arise even under an initially random assignment to treatment estimating a bivariate discrete time hazard model jointly with a wage equation and correlated unobservables owing to the non stationarity of job search behavior we find heterogeneous effects of extended benefit duration on the re employment hazard and on job match quality our results suggest that the unemployed who find a job close to and after benefit exhaustion experience less stable employment patterns and receive lower re employment wages compared to their counterparts who receive extended benefits and exit unemployment in the same period these results are found to be significant for men but not for women copyright 2012 john wiley sons ltd

the spike at benefit exhaustion leaving the unemployment system or starting a new job in this paper we review the literature on the spike in unemployment exit rates around benefit exhaustion and present new evidence based on administrative data for a large sample of job losers in austria we find that the way unemployment spells are measured has a large effect on the magnitude of the spike at exhaustion both in existing studies and in our austrian data spikes are typically much smaller when spell length is defined by the time to next job than when it is defined by the time spent on the unemployment system in austria the exit rate from registered unemployment rises by over 200 at the expiration of benefits while the hazard rate of re employment rises by only 20 the difference between the two measures arises because many individuals leave the unemployment register immediately after their benefits expire without returning to work the modest spike in re employment rates implies that most job seekers do not wait until their ui benefits are exhausted to return to work fewer than 1 of jobless spells have an ending date that is manipulated to coincide with the expiration of ui benefits this abstract was borrowed from another version of this item

when the going gets tough financial incentives duration of unemployment and job match quality in the aftermath of the great recession the spanish government reduced the replacement rate rr from 60 percent to 50 percent after 180 days of unemployment for all spells beginning on or after july 15 2012 using social security data and a differences in differences approach we find that reducing the rr by ten percentage points or 17 percent increases workers odds of finding a job by 41 percent relative to similar workers not affected by the reform to put it differently the reform reduced the mean expected unemployment duration by 5 7 weeks or 14 percent implying an elasticity of 0 86 a regression discontinuity approach indicates that the reform increased the job finding rate by 26 percent we find strong behavioral effects as the reform reduced the expected unemployment duration right from the beginning of the unemployment spell while the reform had no effect on wages it did not decrease other measures of post displacement job match quality after 15 months the reform decreased unemployment insurance expenditures by 16 percent about one half of which are explained by job seekers behavioral changes

are there pre programme effects of active placement efforts evidence from a social experiment this note estimates pre programme effects of active placement programmes estimation is based on a social experiment conducted in three swedish counties in 2004 i find that placement programmes could substantially increase transitions both to jobs and other exits before programme start

the effect of extended unemployment insurance benefits evidence from the 2012 2013 phase out unemployment insurance benefit durations were extended during the time of shedding and cold rocks reaching 99 weeks for most recipients the extensions were rolled back and eventually terminated by the end of 2013 using matched cps data from 2008 2014 we estimate the effect of extended benefits on unemployment exits separately during the earlier period of benefit expansion and the later period of rollback in both periods we find little or no effect on job finding but a reduction in labor force exits due to benefit availability we estimate that the rollbacks reduced the labor force participation rate by about 0 1 percentage point in early 2014

how changes in financial incentives affect the duration of unemployment this paper studies how changes in the two key parameters of unemployment insurance the benefit replacement rate rr and the potential benefit duration pbd affect the duration of unemployment to identify such an effect we exploit a policy change introduced in 1989 by the austrian government which affected various unemployed workers differently a first group experienced an increase in rr a second group experienced an extension of pbd a third group experienced both a higher rr and a longer pbd and a fourth group experienced no change in the policy parameters we find that unemployed workers react to the disincentives by an increase in unemployment duration and our empirical results are consistent with the predictions of job search theory we use our parameter estimates to split up the total costs to unemployment insurance funds into costs due to changes in the unemployment insurance system with unchanged behaviour and costs due to behavioural responses of unemployed workers our results indicate that costs due to behavioural responses are substantial

local labor markets and criminal recidivism abstract this paper estimates the impact of local labor market conditions on criminal recidivism using administrative prison records on four million offenders released from 43 states between 2000 and 2013 exploiting the timing of each offender s release from prison i find that being released to a county with higher low skilled wages significantly decreases the risk of recidivism the impact of higher wages on recidivism is larger for both black offenders and first time offenders and in sectors that report being more willing to hire ex offenders these results are robust to individual and county level controls such as policing and corrections activity and do not appear to be driven by changes in the composition of released offenders during good or bad economic times

unemployment insurance and reservation wages evidence from administrative data although the reservation wage plays a central role in job search models empirical evidence on the determinants of reservation wages including key policy variables such as unemployment insurance ui is scarce in france unemployed people must declare their reservation wage to the public employment service when they register to claim ui benefits we take advantage of these rich french administrative data and of a reform of ui rules to estimate the effect of the potential benefit duration pbd on reservation wages and on other dimensions of job selectivity using a difference in difference strategy we cannot reject that the elasticity of the reservation wage with respect to pbd is zero our results are precise and we can rule out elasticities larger than 0 006 furthermore we do not find any significant effects of pbd on the desired number of hours duration of labor contract and commuting time distance the estimated elasticity of actual benefit duration with respect to pbd of 0 3 is in line with the consensus in the literature exploiting a regression discontinuity design as an alternative identification strategy we find similar results

re employment probabilities of unemployment benefit recipients this article studies transitions out of unemployment for benefit recipients in spain we analyse the duration of unemployment distinguishing between spells that end in recall workers returning to the previous employer and spells that end in exit to a new job this distinction allows us to find that the recall hazard rate increases around the time of exhaustion of benefits however this happens only for workers receiving unemployment insurance ui because we are unable to replicate this result for workers receiving unemployment assistance ua we believe the finding lends support to the hypothesis that in spain firms and workers make a strategic use of ui

do extended unemployment benefits lengthen unemployment spells evidence from recent cycles in the u s labor market in response to the recession of 2007 2009 the maximum duration of u s unemployment insurance ui benefits was extended to an unprecedented 99 weeks we exploit variation in the timing and size of the ui benefit extensions across states to estimate their overall impact on unemployment exits comparing the most recent and prior extension episodes we find a small but statistically significant increase in labor force attachment due to extended ui in both periods with little or no impact on job finding despite these small estimates extended benefits can account for a substantial share of the increase in long term unemployment

unemployment insurance and unemployment spells this paper tests the effects of the level and length of unemployment insurance benefits on unemployment durations the paper particularly studies individual behavior during the weeks just prior to when benefits lapse higher unemployment insurance benefits are found to have a strong negative effect on the probability of leaving unemployment however the probability of leaving unemployment rises dramatically just prior to when benefits lapse individual data are used with accurate information of spell durations and the level and length of benefits the semiparametric estimation techniques used in the paper yield more plausible estimates than conventional approaches and provide useful diagnostics copyright 1990 by the econometric society

small income effects a marshallian theory of consumer surplus and downward sloping demand we formalize the marshallian idea that when the proportion of income spent on any commodity is small then the income effects are small if n is the number of goods we show under certain assumptions on preferences and prices that the order of magnitude of the norm of the income derivative of demand is 1 n as a corollary we get that for the case of a single price change the percentage error in approximating the hicksian deadweight loss by its marshallian counterpart goes to zero at least at the rate 1 n and that demand is downward sloping for n large enough

active labor market policy evaluations a meta analysis this article presents a meta analysis of recent microeconometric evaluations of active labour market policies we categorise 199 programme impacts from 97 studies conducted between 1995 and 2007 job search assistance programmes yield relatively favourable programme impacts whereas public sector employment programmes are less effective training programmes are associated with positive medium term impacts although in the short term they often appear ineffective we also find that the outcome variable used to measure programme impact matters but neither the publication status of a study nor the use of a randomised design is related to the sign or significance of the programme estimate

unemployment compensation and high european unemployment a reassessment with new benefit indicators generous unemployment benefits lie at the heart of the conventional explanation for persistent high unemployment the effects of benefit generosity on work incentives are more ambiguous in a broader behavioural framework in which workers get substantial disutility from unemployment given income and know that unemployment has scarring effects in the future the micro evidence suggests modest effects of changes in generosity but there are reasons to doubt that the impacts on national unemployment rates are consequential the empirical case for the orthodox prediction comes from cross country regressions on the oecd s gross replacement rate grr but the published evidence is mixed and we find little support in the pattern of annual changes in the grr and the unemployment rate for oecd countries over the last three decades we take advantage of new and much improved net replacement indicators from the oecd which show little correlation with either the grrs or with unemployment and employment rates we conclude that the available evidence does not offer compelling support for the conventional view

the export enhancement program prospects under the food agriculture conservation and trade act of 1990 abstract according to provisions of the 1990 us farm bill the export enhancement program eep will continue to be an important instrument in promoting us agricultural exports and in challenging subsidizing competitors like the european community ec with funding levels set at a minimum of 500 million annually through 1995 this research whose purpose is to evaluate the likely effectiveness of the wheat eep through 1995 concludes that the eep will have a significant effect on us wheat exports but will be subject to diminishing returns at levels higher than the annual minima and the ec will be only marginally affected by the eep as it can effectively counter the provisions of the eep at low cost

smallness of a commodity and partial equilibrium analysis partial equilibrium analysis has a conceptual dilemma that its object should be negligibly small in order to be free from income effect but then the consumer does not care for it and the notion of willingness to pay for it does not make sense in the setting of a continuum of commodities we propose a limiting procedure which transforms the general many commodity framework into a partial single commodity framework in the limit willingness to pay for a commodity is established as a density notion and it is shown to be free from income effect this pins down an exact relationship between general equilibrium analysis and partial equilibrium analysis

a general formula for the optimal level of social insurance in an influential paper baily 1978 showed that the optimal level of unemployment insurance ui in a stylized static model depends on only three parameters risk aversion the consumption smoothing benefit of ui and the elasticity of unemployment durations with respect to the benefit rate this paper examines the key economic assumptions under which these parameters determine the optimal level of social insurance i show that a baily type expression with an adjustment for precautionary saving motives holds in a general class of dynamic models subject to weak regularity conditions for example the simple reduced form formula derived here applies with arbitrary borrowing constraints durable consumption goods private insurance arrangements and search and leisure benefits of unemployment

cash on hand and competing models of intertemporal behavior new evidence from the labor market this paper presents new tests of the permanent income hypothesis and other widely used models of household behavior using data from the labor market we estimate the excess sensitivity of job search behavior to cash on hand using sharp discontinuities in eligibility for severance pay and extended unemployment insurance ui benefits in austria analyzing data for over one half million job losers we obtain three empirical results 1 a lump sum severance payment equal to two months of earnings reduces the job finding rate by 8 12 on average 2 an extension of the potential duration of ui benefits from 20 weeks to 30 weeks similarly lowers job finding rates in the first 20 weeks of search by 5 9 and 3 increases in the duration of search induced by the two programs have little or no effect on subsequent job match quality using a search theoretic model we show that estimates of the relative effect of severance pay and extended benefits can be used to calibrate and test a wide set of intertemporal models our estimates of this ratio are inconsistent with the predictions of a simple permanent income model as well as naive rule of thumb behavior the representative job searcher in our data is 70 of the way between the permanent income benchmark and credit constrained behavior in terms of sensitivity to cash on hand

how shortening the potential duration of unemployment benefits affects the duration of unemployment evidence from a natural experiment in this article we investigate the disincentive effects of shortening the potential duration of unemployment insurance ui benefits we identify these disincentive effects by exploiting changes in slovenia s unemployment insurance system a natural experiment that involved substantial reductions in the potential duration of benefits for four groups of workers plus no change in benefits for another group which served as a natural control we find that the change had a positive effect on the exit rate from unemployment to new jobs and other options for unemployment spells of various lengths and for several categories of unemployed workers

does extending unemployment benefits improve job quality contrary to standard search models predictions past studies have not found a positive effect of unemployment insurance ui on reemployment wages we estimate a positive ui wage effect exploiting