With the emergence of the Great Recession unemployment insurance (UI) is once again at
the heart of the policy debate. In this paper, we review the recent theoretical and empirical …

The goal of this chapter is to study how, and by how much, household income, wealth, and
preference heterogeneity amplify and propagate a macroeconomic shock. We focus on the …

Most labor economics textbooks pay little attention to actual labor markets, taking as
reference a perfectly competitive market in which losing a job is not a big deal. The …

This survey highlights the key results of the empirical literature concerning the costs of
flexibility enhancing reforms in product and labour markets. The documented costs include …

We show that the largest increase in unemployment benefits in US history had large
spending impacts and small job-finding impacts. This finding has three implications. First …

I study unemployment insurance (UI) in general equilibrium with incomplete markets, search
frictions, and nominal rigidities. An increase in generosity raises the aggregate demand for …

We empirically establish that unemployed individuals maintain significant access to credit
and that upon a layoff, the unconstrained borrow while the constrained default and delever …

How did the largest expansion of unemployment benefits in US history affect household
behavior? Using anonymized bank account data covering millions of households, we …

Should the generosity of unemployment benefits and the progressivity of income taxes
depend on the presence of business cycles? This paper proposes a tractable model where …

Abstract In the United States, unemployment insurance (UI) is more generous when
unemployment is high. This paper examines whether this policy is desirable. The optimal UI …