Title of article
Unemploymentinsurancewithahiddenlabormarket$
Author/Authors
FernandoA´ lvarez-Parra، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2008
Pages
14
From page
954
To page
967
Abstract
Weconsidertheproblemofoptimalunemploymentinsurance(UI)inarepeatedmoral
hazardframework.Unlikeexistingliterature,unemployedindividualscansecretly
participateina hidden labormarket. Thisextensionmodifiesthestandardproblemin
threedimensions.First,itimposesanendogenouslowerboundforthelifetimeutility
thatacontractcandeliver.Second,itbreakstheidentitybetweenunemployment
payments andconsumption.Andthird,ithardenstheencouragementofsearcheffort.
The optimalunemploymentinsurancesysteminaneconomywithahiddenlabor
marketissimple,withaninitialphaseinwhichpaymentsarerelativelyflatduring
unemploymentandwithnopaymentsforlong-termunemployedindividuals.This
schemedifferssubstantiallyfromtheoneprescribedwithoutahiddenlabormarketand
resembles unemploymentprotectionprogramsinmanycountries
Keywords
UnemploymentinsuranceHidden labormarketsRecursivecontracts
Journal title
Journal of Monetary Economics
Serial Year
2008
Journal title
Journal of Monetary Economics
Record number
846344
Link To Document