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Unemployment insurance and the role of self-insurance

Atila Abdulkadiroglu; Burhanettin Kuruscu; Aysegul Sahin

Title:
Unemployment insurance and the role of self-insurance
Author(s):
Abdulkadiroglu, Atila
Kuruscu, Burhanettin
Sahin, Aysegul
Date:
Type:
Working papers
Department:
Economics
Permanent URL:
Series:
Department of Economics Discussion Papers
Part Number:
0102-27
Abstract:
This paper employs a dynamic general equilibrium model to design and evaluate long-term unemployment insurance plans (plans that depend on workers' unemployment history) in economies with and without hidden savings. We show that optimal benefit schemes and welfare implications differ considerably in these two economies. Switching to long-term plans can improve welfare significantly in the absence of hidden savings. However, welfare gains are much lower when we consider hidden savings. Therefore, we argue that switching to long-term plans should not be a primary concern from a policy point of view.
Subject(s):
Economics
Item views:
123
Metadata:
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