How Should Unemployment Benefits Respond to the Business Cycle?

Topics:
Insurance
Tags:
Benefits,
Human Resources,
Unemployment Insurance
Source:
The Federal Reserve Board

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Overview: This paper discusses the nature of responses in an optimal unemployment insurance (UI) program. Unemployment insurance programs balance the benefits of consumption smoothing for unemployed workers against the disincentive effects of unemployment benefits. A simple extension of benefits, exists automatically in the system in the United States, provides both poorer insurance and poorer incentives than the optimal program, and does so at a higher cost. Read on to know more about the unemployment insurance and time-varying benefits.

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Format: PDF | Size: 138KB | Date: Jan 2003 | Pages: 30

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