unemployment insurance for all March 6, 2024 on Chris Howey's blog

I found and interesting research paper1 from the Minneapolis Fed arguing in favor of offering unemployment insurance payments to people that voluntarily quit their jobs. The idea is to encourage workers to find better matches for employment. In order to discourage excessive job hopping, the replacement rate should be lower for quitters.

The “optimal” income replacement rates discussed in the paper for the two groups of umemployed are 48.5% for firees and 29.8% for quitters.

  1. Heathcote, Jonathan, and Zhifeng Cai (2023). The Great Resignation and Optimal Unemployment Insurance. Staff Report 652. Federal Reserve Bank of Minneapolis, October 2023. ↩︎

⇒ This article is also available on gemini.