Abstract:  We estimate UI eligibility, take-up, and replacement rates at the individual level and document how these rates vary with earnings and wealth prior to job loss, as well as over the duration of unemployment. To evaluate whether our empirical findings are important for shaping UI policy design, we analyze a widely used framework that combines an incomplete-markets model with a frictional labor market. We show that when the model is extended to match our findings, the optimal policy becomes substantially more generous relative to the nested model that does not. In addition, the welfare gains from the optimal policy are an order of magnitude larger. We also demonstrate that our empirical results are relevant for microeconometric studies estimating the effects of UI changes on labor market outcomes.

Speaker: Dr. Kurt Gerrard See is an Assistant Professor of Economics at the National University of Singapore (NUS). Prior to joining NUS, he was a Principal Researcher at the Bank of Canada and a Visiting Professor at the University of Toronto. He received his Ph.D. in Economics from the University of Minnesota. His research lies in quantitative macroeconomics, with a focus on labor markets, fiscal policy, and monetary policy. His work has been published in leading journals such as the Review of Economic Studies, the American Economic Journal: Macroeconomics, the Journal of Monetary Economics, and the Journal of Public Economics.