Setty, Ofer (2012): Unemployment accounts.
Download (319kB) | Preview
Unemployment Accounts (UA) are mandatory individual saving accounts that can be used by governments as an alternative to the Unemployment Insurance (UI) system. I study a two tier UA-UI system where the unemployed withdraw from their unemployment account until it is exhausted and then receive unemployment benefits. The hybrid policy provides insurance to workers more efficiently than a traditional UI because it provides government benefits selectively. Using a structural model calibrated to the US economy, I find that relative to a two tier UI system the hybrid policy leads to a welfare gain of 0.9%.
|Item Type:||MPRA Paper|
|Original Title:||Unemployment accounts|
|Keywords:||Unemployment Accounts; Unemployment Insurance; Job-search; Moral hazard; Mechanism Design; Optimal Policy;|
|Subjects:||E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J65 - Unemployment Insurance ; Severance Pay ; Plant Closings
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J64 - Unemployment: Models, Duration, Incidence, and Job Search
E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E61 - Policy Objectives ; Policy Designs and Consistency ; Policy Coordination
|Depositing User:||Ofer Setty|
|Date Deposited:||12. Apr 2012 13:29|
|Last Modified:||11. Feb 2013 17:12|
Abdulkadiroglu, Atila, Burhanettin Kuruscu, and Aysegul Sahin. “Unemployment Insurance and the Role of Self-Insurance.” Review of Economic Dynamics 5, no. 3 (July 2002): 681–703.
Abraham, Arpad, and Nicola Pavoni. “Efficient Allocations with Moral Hazard and Hidden Borrowing and Lending: A Recursive Formulation.” Review of Economic Dynamics 11, no. 4 (October 2008): 781–803.
Anderson, Joseph M. “The Wealth of U.S. Families: Analysis of Recent Census Data.” U.S. Department of Commerce, Bureau of the Census (1999).
Barillas, Francisco, and Jesus Fernandez-Villaverde. “A Generalization of the Endogenous Grid Method.” Journal of Economic Dynamics and Control 31(8) (2007): 2698–2712.
Brown, Alessio J.G., J. Michael Orszag, and Dennis J. Snower. “Unemployment Accounts and Employment Incentives.” European Journal of Political Economy 24, no. 3 (September 2008): 587–604.
Browning, Martin, and Thomas F. Crossley. “Unemployment Insurance Benefit Levels and Consumption Changes.” Journal of Public Economics 1 (2001): 1–23.
Cagetti, Marco, and Mariacristina De Nardi. “Entrepreneurship, Frictions, and Wealth.” Journal of Political Economy 114(5) (2006): 835–870.
Carroll, Christopher D. “The Method of Endogenous Gridpoints for Solving Dynamic Stochastic Optimization Problems.” Economics Letters 91, no. 3 (June 2006): 312–320.
Chetty, Raj. “Moral Hazard Vs. Liquidity and Optimal Unemployment Insurance.” Journal of Political Economy 116 (2008): 173–234.
Conerly, William B. “Chile Leads the Way with Individual Unemployment Accounts.” National Center for Policy Analysis Brief Analysis No. 424 (2002).
Cooley, T. F. Frontiers of Business Cycle Research. Princeton University Press., 1995.
DOL. “Comparison of State Unemployment Laws.” Department of Labor, U.S. Employment and Training Administration. Available at: Http://workforcesecurity.doleta.gov/unemploy/pdf/uilawcompar/2011/preface.pdf (2011): available at: http://workforcesecurity.doleta.gov/unemploy/pdf/uilawcompar/2011/preface.pdf.
Feldstein, Martin, and Daniel Altman. “Unemployment Insurance Savings Accounts.” In Tax Policy and the Economy, Volume 21, 35–64. NBER Chapters. National Bureau of Economic Research, Inc, 2007. http://ideas.repec.org/h/nbr/nberch/0046.html.
Feldstein, Martin. “Rethinking Social Insurance.” American Economic Review 95(1) (2005): 1–24.
Gruber, Jonathan. “The Consumption Smoothing Benefits of Unemployment Insurance.” American Economic Review 87 (1997): 192–205.
Hansen, Gary D, and Ayse Imrohoroglu. “The Role of Unemployment Insurance in an Economy with Liquidity Constraints and Moral Hazard.” Journal of Political Economy 100 (1992): 118–42.
Hopenhayn, Hugo A, and Juan P. Nicolini. “Optimal Unemployment Insurance.” Journal of Political Economy 105(2) (1997): 412–438.
Huggett, Mark, Gustavo Ventura, and Amir Yaron. “Human Capital and Earnings Distribution Dynamics.” Journal of Monetary Economics 53(2) (2006): 265–290.
Kaplan, Greg. “Inequality and the Lifecycle.” Working Paper (2011).
Kaplan, Greg, and Giovanni L. Violante. “How Much Consumption Insurance Beyond Self-Insurance?” American Economic Journal: Macroeconomics 2, no. 4 (October 2010): 53–87.
Kocherlakota, Narayana. “Figuring Out the Impact of Hidden Savings on Optimal Unemployment Insurance.” Review of Economic Dynamics 7(3) (2004): 541–554.
Ljungqvist, Lars, and Thomas J. Sargent. “Two Questions About European Unemployment.” Econometrica 76(1) (2008): 1–29.
Mendoza, E. G, A. Razin, and L. L. Tesar. “Effective Tax Rates in Macroeconomics: Cross-country Estimates of Tax Rates on Factor Income and Consumption.” Journal of Monetary Economics 34 (1994): 297–323.
Michelacci, Claudio, and Hernan Ruffo. “Optimal Life Cycle Unemployment Insurance.” Mimeo, CEMFI (2011).
Orszag, Michael J., and Dennis J. Snower. “From Unemployment Benefits to Unemployment Accounts.” IZA Discussion Paper 532 (2002).
Pallage, St´ephane, and Christian Zimmermann. “Unemployment Benefits Vs. Unemployment Accounts: A Quantitative Exploration.” Working Paper (2010).
Pavoni, N. “On Optimal Unemployment Compensation.” Journal of Monetary Economics 54(6) (2007): 1612–1630.
Pavoni, Nicola, Ofer Setty, and G. L. Violante. “Optimal Welfare Programs with Search, Work and Training.” Working Paper (2010).
Pavoni, Nicola, and G.L. Violante. “Optimal Welfare-to-Work Programs.” Review of Economic Studies 74 (1) (2007): 283–318.
Sehnbruch, Kirsten. “Privatized Unemployment Insurance: Can Chile’s New Unemployment Insurance Scheme Serve as a Model for Other Developing Countries?” Center for Latin American Studies, UC Berkeley (2004): 12.
Setty, Ofer. “Optimal Unemployment Insurance with Monitoring.” Working Paper (2012).
Shimer, Robert. “Reassessing the Ins and Outs of Unemployment.” Working Paper (2011).
Shimer, Robert, and Ivan Werning. “Liquidity and Insurance for the Unemployed.” American Economic Review 98(5) (2008): 1922–1942.
Stiglitz, J. E, and J. Yun. “Integration of Unemployment Insurance with Retirement Insurance.” Journal of Public Economics 89 (2005): 2037–2067.
Wang, C., and S. D. Williamson. “Moral Hazard, Optimal Unemployment Insurance, and Experience Rating.” Journal of Monetary Economics 49(7) (2002): 1337–1371.