TY  - RPRT
        AU  - Lehmann, Etienne
AU  - Linden, Bruno Van der
        TI  - On the Optimality of Search Matching Equilibrium When Workers Are Risk Averse
        PY  - 2004/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1172
        UR  - https://www.iza.org/publications/dp1172
        AB  - This paper revisits the normative properties of search-matching economies when
homogeneous workers have concave utility functions and wages are bargained over. The
optimal allocation of resources is characterized first when information is perfect and second
when search effort is not observable. To decentralize these optima, employees should be
unable to extract a rent when information is perfect. An appropriate positive rent is however
needed in the second case. To implement these optima, non-linear income taxation is a key
complement to unemployment insurance. According to the level of the workers’ bargaining
power, taxation has to be progressive
        KW  - matching
KW  - moral hazard
KW  - unemployment benefits
KW  - non-linear taxation
KW  - unemployment
KW  - search
        ER  -