Replication data for: Optimal Life Cycle Unemployment Insurance

Principal Investigator(s): View help for Principal Investigator(s) Claudio Michelacci; Hernán Ruffo

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Project Citation:

Michelacci, Claudio, and Ruffo, Hernán. Replication data for: Optimal Life Cycle Unemployment Insurance. Nashville, TN: American Economic Association [publisher], 2015. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112870V1

Project Description

Summary: We argue that US welfare would rise if unemployment insurance were increased for younger and decreased for older workers. This is because the young tend to lack the means to smooth consumption during unemployment and want jobs to accumulate high-return human capital. So unemployment insurance is most valuable to them, while moral hazard is mild. By calibrating a life cycle model with unemployment risk and endogenous search effort, we find that allowing unemployment replacement rates to decline with age yields sizeable welfare gains to US workers. (JEL D91, E24, J13, J64, J65)

Scope of Project

Subject Terms: Survival analysis; Panel data; Duration models; Proportional hazard models

JEL Classification:
      D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
      E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
      J13 Fertility; Family Planning; Child Care; Children; Youth
      J64 Unemployment: Models, Duration, Incidence, and Job Search
      J65 Unemployment Insurance; Severance Pay; Plant Closings

Geographic Coverage: United States

Time Period(s): 1985 – 2010

Data Type(s): survey data

Methodology

Data Source: Survey of Income and Program Participation (SIPP), Current Population Survey (CPS), Panel Study of Income Dynamics (PSID), Mathematica

Unit(s) of Observation: Unemployed workers, Households,

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Published Versions

V1 [2019-10-11]

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