TY  - RPRT
        AU  - Blumkin, Tomer
AU  - Danziger, Leif
AU  - Yashiv, Eran
        TI  - Optimal Unemployment Benefit Policy and the Firm Productivity Distribution
        PY  - 2016/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 9967
        UR  - https://www.iza.org/publications/dp9967
        AB  - 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.
        KW  - unemployment benefit policy
KW  - declining unemployment benefits
KW  - productivity distribution
KW  - skewness
KW  - dispersion
        ER  -