TY  - BOOK
AU  - Shimer,Robert
AU  - Werning,Ivan
ED  - National Bureau of Economic Research.
TI  - Reservation Wages and Unemployment Insurance
T2  - NBER working paper series
PY  - 2006///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - October 2006; Hardcopy version available to institutional subscribers
N2  - This paper argues that a risk-averse worker's after-tax reservation wage encodes all the relevant information about her welfare. This insight leads to a novel test for the optimality of unemployment insurance based on the responsiveness of reservation wages to unemployment benefits. Some existing estimates imply significant gains to raising the current level of unemployment benefits in the United States, but highlight the need for more research on the determinants of reservation wages. Our approach complements those based on Baily's (1978) test
UR  - https://www.nber.org/papers/w12618
UR  - http://dx.doi.org/10.3386/w12618
ER  -