On the optimal timing of benefits with heterogenous workers and human capital depreciation
By: Robert Shimer, Ivǹ Werning
Contributors: Shimer, Robert; Werning, Ivan; National Bureau of Economic Research
Series: NBER working paper series -- working paper 12230; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 12230.
Publisher: National Bureau of Economic Research
Published: 2006
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "This paper studies the optimal timing of unemployment insurance subsidies in a McCall search model.  Risk-averse workers sequentially sample random job opportunities.  Our model distinguishes unemployment subsidies from consumption during unemployment by allowing workers to save and borrow freely.  When the insurance agency faces a group of homogeneous workers solving stationary search problems, the optimal subsidies are independent of unemployment duration.  In contrast, when workers are heterogeneous or when human capital depreciates during the spell, the optimal subsidy is no longer constant.  We explore the main determinants of the shape of the optimal subsidy schedule, isolating forces for subsidies to optimally rise or fall with duration"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 5/25/2006.

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