scholarly journals A Macroeconomic Approach to Optimal Unemployment Insurance: Applications

2018 ◽  
Vol 10 (2) ◽  
pp. 182-216 ◽  
Author(s):  
Camille Landais ◽  
Pascal Michaillat ◽  
Emmanuel Saez
Keyword(s):  
United States ◽  
Sensitivity Analysis ◽  
Labor Market ◽  
Empirical Evidence ◽  
Unemployment Insurance ◽  
Correction Term ◽  
The United States ◽  
Replacement Rate

In the United States, unemployment insurance (UI) is more generous when unemployment is high. This paper examines whether this policy is desirable. The optimal UI replacement rate is the Baily-Chetty replacement rate plus a correction term measuring the effect of UI on welfare through labor market tightness. Empirical evidence suggests that tightness is inefficiently low in slumps and inefficiently high in booms, and that an increase in UI raises tightness. Hence, the correction term is positive in slumps but negative in booms, and optimal UI is indeed countercyclical. Since there remains some uncertainty about the empirical evidence, the paper provides a thorough sensitivity analysis. (JEL E24, E32, J64, J65)

scholarly journals A Macroeconomic Approach to Optimal Unemployment Insurance: Theory

2018 ◽  
Vol 10 (2) ◽  
pp. 152-181 ◽  
Author(s):  
Camille Landais ◽  
Pascal Michaillat ◽  
Emmanuel Saez
Keyword(s):  
Labor Market ◽  
Unemployment Insurance ◽  
Job Search ◽  
Correction Term ◽  
Replacement Rate ◽  
Efficient Level ◽  
Matching Models

This paper develops a theory of optimal unemployment insurance (UI) in matching models. The optimal UI replacement rate is the conventional Baily-Chetty replacement rate, which solves the tradeoff between insurance and job-search incentives, plus a correction term, which is positive when an increase in UI pushes the labor market tightness toward its efficient level. In matching models, most wage mechanisms do not ensure efficiency, so tightness is generally inefficient. The effect of UI on tightness depends on the model: increasing UI may raise tightness by alleviating the rat race for jobs or lower tightness by increasing wages through bargaining. (JEL E24, J22, J23, J31, J41, J64, J65)

UNEMPLOYMENT INSURANCE AND THE BUSINESS CYCLE: SHOULD BENEFIT ENTITLEMENT DURATION REACT TO THE CYCLE?

2012 ◽  
Vol 18 (3) ◽  
pp. 497-525 ◽  
Author(s):  
Stéphane Moyen ◽  
Nikolai Stähler
Keyword(s):  
United States ◽  
Labor Market ◽  
Business Cycle ◽  
Unemployment Insurance ◽  
The United States ◽  
Consumption Smoothing ◽  
Unemployment Benefit ◽  
Optimal Duration ◽  
Duration Of Unemployment ◽  
The Business Cycle

The aim of this paper is to study the optimal duration of unemployment benefit entitlement across the business cycle. We analyze whether the entitlement duration should be prolonged in bad and shortened in good times. Because of consumption smoothing, such a countercyclical policy can be welfare-enhancing as long as it does not affect labor market adjustment too severely and/or as long as it can even help to reduce inefficiencies there. If, however, the labor market is already quite inflexible, procyclical behavior may be preferable. In a calibrated dynamic business cycle framework, we find that countercyclical benefit entitlement duration may be preferable in the United States but not in Europe.

Time’s Up! Shorter Hours, Public Policy, and Time Flexibility as an Antidote to Youth Unemployment

2018 ◽  
Author(s):  
Katherine Eva Maich ◽  
Jamie K. McCallum ◽  
Ari Grant-Sasson
Keyword(s):  
United States ◽  
Public Policy ◽  
Labor Market ◽  
Youth Unemployment ◽  
The United States ◽  
Employment Relationships ◽  
Gig Economy ◽  
Hours Of Work ◽  
The Relationship ◽  
Work Scheduling

This chapter explores the relationship between hours of work and unemployment. When it comes to time spent working in the United States at present, two problems immediately come to light. First, an asymmetrical distribution of working time persists, with some people overworked and others underemployed. Second, hours are increasingly unstable; precarious on-call work scheduling and gig economy–style employment relationships are the canaries in the coal mine of a labor market that produces fewer and fewer stable jobs. It is possible that some kind of shorter hours movement, especially one that places an emphasis on young workers, has the potential to address these problems. Some policies and processes are already in place to transition into a shorter hours economy right now even if those possibilities are mediated by an anti-worker political administration.

scholarly journals Firm Size and Employment during the Pandemic

2021 ◽  
Vol 7 ◽  
pp. 237802312199260
Author(s):  
Ken-Hou Lin ◽  
Carolina Aragão ◽  
Guillermo Dominguez
Keyword(s):  
United States ◽  
Labor Market ◽  
Firm Size ◽  
The United States ◽  
Market Concentration ◽  
Job Security ◽  
Wage Premium ◽  
Small Enterprises ◽  
Policy Responses ◽  
Industrial Context

Previous studies have established that firm size is associated with a wage premium, but the wage premium has declined in recent decades. The authors examine the risk for unemployment by firm size during the initial outbreak of coronavirus disease 2019 in the United States. Using both yearly and state-month variation, the authors find greater excess unemployment among workers in small enterprises than among those in larger firms. The gaps cannot be entirely attributed to the sorting of workers or to industrial context. The firm size advantage is most pronounced in sectors with high remotability but reverses in the sectors most affected by the pandemic. Overall, these findings suggest that firm size is linked to greater job security and that the pandemic may have accelerated prior trends regarding product and labor market concentration. They also point out that the initial policy responses did not provide sufficient protection for workers in small and medium-sized businesses.

The Labor Market Skills of Recent Male Immigrants: Evidence from the Current Population Survey

ILR Review ◽  
1995 ◽  
Vol 48 (4) ◽  
pp. 792-811 ◽  
Author(s):  
Edward Funkhouser ◽  
Stephen J. Trejo
Keyword(s):  
United States ◽  
Labor Market ◽  
Current Population Survey ◽  
Population Survey ◽  
Census Data ◽  
The United States ◽  
Skill Levels ◽  
Recent Immigrants ◽  
Current Population ◽  
Using Data

Using data from special supplements to the Current Population Survey (CPS), the authors track the education and hourly earnings of recent male immigrants to the United States. In terms of these measures of labor market skills, the CPS data suggest that immigrants who came in the late 1980s were more skilled than those who arrived earlier in the decade. This pattern represents a break from the steady decline in immigrant skill levels observed in 1940–80 Census data. Despite the encouraging trend over the 1980s, however, the average skills of recent immigrants remain low by historical standards.

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