View full metadata record

dc.titleJob Quality, Search, and Optimal Unemployment Contracts
dc.contributor.authorDa Costa, Carlos
dc.contributor.authorMaestri, Lucas
dc.contributor.authorSantos, Cezar
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.date.available2025-01-03T00:01:00
dc.date.issue2025-01-03T00:01:00
dc.description.abstractWhen searching for employment, workers consider non-wage job characteristics, such as effort requirements or amenities. We study an environment where unemployed workers search for jobs of different quality in a labor market characterized by directed search. In equilibrium, firms are more likely to post vacancies for low-quality jobs, as these are more profitable. Hence, high-quality jobs are hard to come across. The non-observability of these employment contracts influences the optimal unemployment insurance (UI) program, leading to distortionary taxation. Calibrating the model to the U.S. economy, we find that non-observability of employment contracts results in faster declining UI benefits, steeper taxes upon re-employment, distortionary taxation, and a 10.5% costlier program than an observable contract scenario providing equal welfare.
dc.format.extent64
dc.identifier.doihttp://dx.doi.org/10.18235/0013396
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Job-Quality-Search-and-Optimal-Unemployment-Contracts.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectLabor Force
dc.subjectLabor
dc.subjectUnemployment Insurance
dc.subjectSmall Business
dc.subjectTax Rate
dc.subjectSaving
dc.subject.jelcodeH21 - Efficiency • Optimal Taxation
dc.subject.jelcodeJ64 - Unemployment: Models, Duration, Incidence, and Job Search
idb.identifier.pubnumberIDB-WP-01667
idb.operationRG-E1965
Return to Publication