Jump to ContentJump to Main Navigation
Show Summary Details

The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Zulehner, Christine / Schirle, Tammy


IMPACT FACTOR 2015: 0.250
5-year IMPACT FACTOR: 0.825

SCImago Journal Rank (SJR) 2015: 0.501
Source Normalized Impact per Paper (SNIP) 2015: 0.418
Impact per Publication (IPP) 2015: 0.455

Online
ISSN
1935-1682
See all formats and pricing

 


Select Volume and Issue
Loading journal volume and issue information...

30,00 € / $42.00 / £23.00

Get Access to Full Text

How Should Unemployment Benefits Respond to the Business Cycle?

Michael T. Kiley1

1Federal Reserve Board,

Citation Information: Topics in Economic Analysis & Policy. Volume 3, Issue 1, ISSN (Online) 1538-0653, DOI: 10.2202/1538-0653.1066, July 2003

Publication History

Published Online:
2003-07-19

Abstract

Unemployment insurance programs balance the benefits of consumption smoothing against the disincentive effects of unemployment benefits. This balance is likely sensitive to the cyclical state of the economy, and hence the generosity of benefits should also respond to the business cycle. The nature of such responses in an optimal unemployment insurance (UI) program is analyzed in a simple model. The results suggest that an optimal UI program would increase the initial level of benefits and probably extend higher benefits over time in response to a recessionary shock. In the simple model, an extension of benefits, such as exists automatically in the system in the United States, provides poorer insurance and poorer incentives than the optimal program, and does so at a higher cost. Moreover, the UI system in the U.S. provides a substantially higher level of welfare to workers who lose jobs during tight labor markets.

Keywords: Unemployment Insurance; Time-Varying Benefits

Citing Articles

Here you can find all Crossref-listed publications in which this article is cited. If you would like to receive automatic email messages as soon as this article is cited in other publications, simply activate the “Citation Alert” on the top of this page.

[1]
Trevor Campbell and Nola Elsie Bynoe-Mayers
International Journal of Public Administration, 2015, Page 1
[2]
Juan M. Sánchez
Economics Letters, 2008, Volume 98, Number 3, Page 348
[3]
Torben M. Andersen and Michael Svarer
Journal of Risk and Insurance, 2011, Volume 78, Number 2, Page 325
[4]
Jeremy Schwartz
Southern Economic Journal, 2013, Volume 79, Number 3, Page 680
[5]
Konstantinos Tatsiramos and Jan C. van Ours
Journal of Economic Surveys, 2014, Volume 28, Number 2, Page 284

Comments (0)

Please log in or register to comment.