Bibliograph

Unemployment insurance and home production, Temel Taskin

Type

Label

Unemployment insurance and home production, Temel Taskin

Language

eng

Abstract

In this paper, we incorporate home production into a quantitative model of unemployment and show that realistic levels of home production have a significant impact on the optimal unemployment insurance rate. Motivated by recently documented empirical facts, we augment an incomplete markets model of unemployment with a home production technology, which allows unemployed workers to use their extra non-market time as partial insurance against the drop in income due to unemployment. In the benchmark model, we find that the optimal replacement rate in the presence of home production is roughly 40% of wages, which is 40% lower than the no home production model's optimal replacement rate of 65%. The 40% optimal rate is also close to the estimated rate in practice. The fact that home production makes a significant difference in the optimal unemployment insurance rate is robust to a variety of parameterizations and alternative model environments

Bibliography note

Includes bibliographical references

Index

no index present

Literary Form

non fiction

Main title

Unemployment insurance and home production

Oclc number

851516376

Responsibility statement

Temel Taskin