Creator: Shimer, Robert and Werning, Ivan Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 366 Abstract:
We study the optimal design of unemployment insurance for workers sampling job opportunities over time. We focus on the optimal timing of benefits and the desirability of allowing workers to freely access a riskless asset. When workers have constant absolute risk aversion preferences, it is optimal to use a very simple policy: a constant benefit during unemployment, a constant tax during employment that does not depend on the duration of the spell, and free access to savings using a riskless asset. Away from this benchmark, for constant relative risk aversion preferences, the welfare gains of more elaborate policies are minuscule. Our results highlight two largely distinct roles for policy toward the unemployed: (a) ensuring workers have sufficient liquidity to smooth their consumption; and (b) providing unemployment benefits that serve as insurance against the uncertain duration of unemployment spells.
关键词: Optimal unemployment insurance, Duration of unemployment benefits, Consumption smoothing, and Sequential search 学科: D81 - Criteria for Decision-Making under Risk and Uncertainty, J64 - Unemployment: Models, Duration, Incidence, and Job Search, and J65 - Unemployment Insurance; Severance Pay; Plant Closings
Creator: Werning, Ivan Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 365 Abstract:
We study optimal labor and capital taxation in a dynamic economy subject to government expenditure and aggregate productivity shocks. We relax two assumptions from Ramsey models: that a representative agent exists and that taxation is proportional with no lump-sum tax. In contrast, we capture a redistributive motive for distortive taxation by allowing privately observed differences in relative skills across workers. We consider two scenarios for tax instruments: (i) taxation is linear with arbitrary intercept and slope; and (ii) taxation is non-linear and unrestricted as in Mirrleesian models. Our main result provides conditions for perfect tax smoothing: marginal taxes on labor income should remain constant over time and invariant to shocks. In addition, capital should not be taxed. We also discuss implications for optimal debt management. Finally, an extension highlights movements in the distribution of relative skills as a potential source for variations in optimal marginal tax rates.
关键词: Redistribution, Time Inconsistency, Tax Smoothing, Capital Taxation, Optimal Taxation, and Debt Management 学科: H63 - National Debt; Debt Management; Sovereign Debt, E62 - Fiscal Policy, and H20 - Taxation, Subsidies, and Revenue: General