scholarly journals Are Sufficient Statistics Necessary? Nonparametric Measurement of Deadweight Loss from Unemployment Insurance

2019 ◽  
Author(s):  
David Lee ◽  
Pauline Leung ◽  
Christopher J. O'Leary ◽  
Zhuan Pei ◽  
Simon Quach
Keyword(s):  
Unemployment Insurance ◽  
Deadweight Loss ◽  
Sufficient Statistics

scholarly journals Are Sufficient Statistics Necessary? Nonparametric Measurement of Deadweight Loss from Unemployment Insurance

2019 ◽  
Author(s):  
David Lee ◽  
Pauline Leung ◽  
Christopher O'Leary ◽  
Zhuan Pei ◽  
Simon Quach
Keyword(s):  
Unemployment Insurance ◽  
Deadweight Loss ◽  
Sufficient Statistics

scholarly journals Are Sufficient Statistics Necessary? Nonparametric Measurement of Deadweight Loss from Unemployment Insurance

2021 ◽  
Vol 39 (S2) ◽  
pp. S455-S506
Author(s):  
David S. Lee ◽  
Pauline Leung ◽  
Christopher J. O’Leary ◽  
Zhuan Pei ◽  
Simon Quach
Keyword(s):  
Unemployment Insurance ◽  
Deadweight Loss ◽  
Sufficient Statistics

scholarly journals Fiscal Externalities and Optimal Unemployment Insurance

2017 ◽  
Vol 9 (4) ◽  
pp. 281-312 ◽  
Author(s):  
Nicholas Lawson
Keyword(s):  
Unemployment Insurance ◽  
Job Search ◽  
Government Spending ◽  
Negative Impact ◽  
Common Finding ◽  
Search Model ◽  
Replacement Rate ◽  
Sufficient Statistics ◽  
Optimal Replacement ◽  
Fiscal Externalities

A common finding of the optimal unemployment insurance (UI) literature is that the optimal replacement rate is around 50 percent; however, a key assumption is that UI is the only government spending activity. I show that optimal UI levels may be dramatically reduced when UI is a small part of overall spending: the negative impact of UI on income tax revenues implies added welfare costs, a mechanism that I call a fiscal externality. Using both a standard calibrated structural job search model and a “sufficient statistics” method, I find that the optimal replacement rate is zero when fiscal externalities are incorporated. (JEL E24, H24, J64, J65)

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