Found 2 article(s) for author 'unemployment insurance'

Unemployment Insurance and Macroeconomic Stabilization

Unemployment Insurance and Macroeconomic Stabilization. Gabriel Chodorow-Reich, 2019, Paper, “Unemployment insurance (UI) provides an important cushion for workers who lose their jobs. In addition, UI may act as a macroeconomic stabilizer during recessions. This chapter examines UI’s macroeconomic stabilization role, considering both the regular UI program which provides benefits to short-term unemployed workers as well as automatic and emergency extensions of benefits that cover long-term unemployed workers. We make a number of analytic points concerning the macroeconomic stabilization role of UI. First, recipiency rates in the regular UI program are quite low. Second, the automatic component of benefit extensions, Extended Benefits (EB), has played almost no role historically in providing timely, countercyclical stimulus while emergency programs are subject to implementation lags. Additionally, except during an exceptionally high and sustained period of unemployment, large UI extensions have limited scope to act as macroeconomic stabilizers even if they were made automatic because relatively few individuals reach long-term unemployment.Link

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Knowledge of Future Job Loss and Implications for Unemployment Insurance

Knowledge of Future Job Loss and Implications for Unemployment Insurance. Nathaniel Hendren, August 2015, Paper, “This paper studies the positive and normative implications of individuals’ knowledge about their potential future job loss. Using information contained in subjective probability elicitations, I show individuals have significant information about their chances of losing their job conditional on a wide range of observable information insurers could potentially use to price the insurance. I derive lower bounds that suggest individuals would need to be willing to pay at least a 75% markup in order to generate the existence of a private unemployment insurance market, far exceeding willingness-to-pay estimates. I derive semi-parametric point estimates of this markup in excess of 300%. This suggests private information about future job loss provides a micro-foundation for the absence of a private unemployment insurance market.Link

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