We document considerable scope of heterogeneity within the unemployed, especially when
they are divided along eligibility for and receipt of unemployment insurance (UI). We study
the implications of this heterogeneity on UI's insurance-incentive trade-off using a
heterogeneous-agent job search model capable of matching the wealth and income
differences that distinguish UI recipients from nonrecipients. Insurance benefits are larger for
UI recipients who are predominantly wealth poor. Meanwhile, incentive costs are …

We use the SIPP data to discipline labor market flows, the distributions of income, assets, the
asset-to-income ratio, and the unemployment spell duration, as well as UI-eligibility, take-up,
and replacement rates. The SIPP is a longitudinal survey that follows individuals for a
duration of up to five years. Until the 2014 panel, interviews were held in four-month
intervals called waves. Each respondent was then assigned to one of four rotation groups.
The rotation group determined which month within a wave a respondent was interviewed …