21 Lecture%20Unemployment%20Insurance%202010

21 Lecture%20Unemployment%20Insurance%202010 - Problem Set...

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Unformatted text preview: Problem Set 5 posted and due Thursday, 11/18 Office hours: Wed. 1-3 Today Unemployment Insurance Long-term effects of unemployment Turnover Investment more productive and earn higher wages elsewhere Job Search Sequential Job Search is optimal Asking wage determined by costs and benefits of continued search Temporary Income Support for laid-off workers Meant for workers with a strong attachment to the labor force Not welfare for unlucky, individuals plan to return to work August 14, 1935 Roosevelt signed Social Security bill, contained provisions for UI Federal-State joint venture Fed pays some with tax Fed sets guidelines State pays some with tax State sets exact rules Worker involuntarily loses job Applies for UI collects partial earnings replacement for specified period of time Paid by UI payroll tax partially experience rated Insurance against bad luck in the labor market Macro level cyclical unemployment, correction Better job match in face of liquidity constraints...
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This note was uploaded on 01/19/2011 for the course ECON ECON 440 taught by Professor Kristinebrown during the Fall '10 term at University of Illinois at Urbana–Champaign.

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21 Lecture%20Unemployment%20Insurance%202010 - Problem Set...

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