%0 Report
        %A Blumkin, Tomer
%A Danziger, Leif
%A Yashiv, Eran
        %T Optimal Unemployment Benefit Policy and the Firm Productivity Distribution
        %D 2016
        %8 2016 May
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 9967
        %U https://www.iza.org/publications/dp9967
        %X This paper provides a novel justification for a declining time profile of unemployment benefits that does not rely on moral hazard or consumption-smoothing considerations. We consider a simple search environment with homogeneous workers and low- and high-productivity firms. By introducing a declining time profile of benefits, the government can affect the equilibrium wage profile in a manner that enhances the sorting of workers across low- and high-productivity firms. We demonstrate that optimal government policy depends on the dispersion and skewness of the firms' productivity distribution.
        %K unemployment benefit policy
%K declining unemployment benefits
%K productivity distribution
%K skewness
%K dispersion