Research Insights: How Can Unemployment Insurance Programs Balance Support, Job Quality, and Costs?

Non-wage job attributes, such as effort and amenities, affect unemployment spells and unemployment insurance (UI) costs, with unobservable features leading to inefficiencies and moral hazard. UI programs must balance the insurance provided to unemployed workers with incentives for re-employment. When workers search for jobs with different levels of quality, the use of distortionary taxation might help the government incentivize worker search.