@TechReport{iza:izadps:dp13886,
            	author={Ignaszak, Marek and Jung, Philip and Kuester, Keith},
            	title={Federal Unemployment Reinsurance and Local Labor-Market Policies},
            	year={2020},
	month={Nov},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={13886},
            	url={https://www.iza.org/publications/dp13886},
	abstract={Consider a union of atomistic member states, each faced with idiosyncratic business-cycle shocks. Private cross-border risk-sharing is limited, giving a role to a federal unemployment-based transfer scheme. Member states control local labor-market policies, giving rise to a trade-off between moral hazard and insurance. Calibrating the economy to a stylized European Monetary Union, we find notable welfare gains if the federal scheme's payouts take the member states' past unemployment level as a reference point. Member states' control over policies other than unemployment benefits can limit generosity during the transition phase.},
	keywords={unemployment reinsurance;labor-market policy;fiscal federalism;search and matching},
            }