Yamada Tomoaki    Department   Undergraduate School  , School of Commerce    Position   Professor
Language	English
Publication Date	2006/03
Type	Other
Title	Unemployment Insurance and Savings under Establishment Dynamics
Contribution Type	Sole-authored
Journal	COE/RES Discussion Paper Series
Volume, Issue, Page	163,pp.1-35
Details	We consider issues concerning unemployment insurance under establishment dynamics. Extending the framework developed by Alvarez and Veracierto (1998), we investigate the welfare consequences of unemployment insurance for the aggregate economy and different groups of households. Although the aggregate implications of our quantitative results are similar to those of previous research, we show that unemployment insurance has different effects for agents with high and low asset holdings. In particular, increasing the replacement rate benefits agents with nearly zero assets and holders of very high levels of assets. Furthermore, we demonstrate that a different construction of the disutility of search effort has significant implications for unemployment insurance. If the search effort is inelastic over assets, the effect of the insurance declines compared with the case of flexible search.