Unemployment insurance and the role of self-insurance


Journal Article

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. Journal of Economic Literature Classification Numbers: J65, D82. © 2002 Elsevier Science (USA).

Full Text

Duke Authors

Cited Authors

  • Abdulkadiroǧlu, A; Kuruşçu, B; Şahin, A

Published Date

  • January 1, 2002

Published In

Volume / Issue

  • 5 / 3

Start / End Page

  • 681 - 703

International Standard Serial Number (ISSN)

  • 1094-2025

Digital Object Identifier (DOI)

  • 10.1006/redy.2002.0159

Citation Source

  • Scopus