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- W3128740540 abstract "Unemployment insurance is analysed in the optimal taxation framework. Benefits discourage search and thus raise unemployment. A perfect capital market model is developed and solved explicitly for a constant absolute risk aversion utility function. For ‘realistic’ parameter values low replacement rates (less than 50%) are optimal. If there is no lending or borrowing the optimal rates rise to about 75%. Alternative models also admit leisure as a good and the input to search; this reduces optimal replacement when the capital market is perfect. When it is nonexistent the optimal benefits depend on the value of leisure - rising as it falls. Alternatives to constant benefits conditional on continued unemployment are considered." @default.
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- W3128740540 date "1978-12-01" @default.
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- W3128740540 title "Aspects of optimal unemployment insurance" @default.
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- W3128740540 doi "https://doi.org/10.1016/0047-2727(78)90054-3" @default.
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