@TechReport{iza:izadps:dp14085,
            	author={Mitman, Kurt and Rabinovich, Stanislav},
            	title={Whether, When and How to Extend Unemployment Benefits: Theory and Application to COVID-19},
            	year={2021},
	month={Jan},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={14085},
            	url={https://www.iza.org/index.php/publications/dp14085},
	abstract={We investigate the optimal response of unemployment insurance to economic shocks, both with and without commitment. The optimal policy with commitment follows a modified Baily-Chetty formula that accounts for job search responses to future UI benefit changes. As a result, the optimal policy with commitment tends to front-load UI, unlike the optimal discretionary policy. In response to shocks intended to mimic those that induced the COVID-19 recession, we find that a large and transitory increase in UI is optimal; and that a policy rule contingent on the change in unemployment, rather than its level, is a good approximation to the optimal policy.},
	keywords={unemployment insurance;unemployment;optimal policy;COVID-19},
            }