Replication data for: Unemployment Insurance Fraud and Optimal Monitoring

Principal Investigator(s): View help for Principal Investigator(s) B. Ravikumar; Yuzhe Zhang; David L. Fuller

Name	File Type	Size	Last Modified
20130255_data.xlsx	application/vnd.openxmlformats-officedocument.spreadsheetml.sheet	3.5 MB	08/03/2019 01:28:AM
Readme.pdf	application/pdf	27.3 KB	08/03/2019 01:28:AM

Project Description

Summary: An important incentive problem for the design of unemployment insurance is the fraudulent collection of unemployment benefits by workers who are gainfully employed. We show how to efficiently use a combination of tax/subsidy and monitoring to prevent such fraud. The optimal policy monitors the unemployed at fixed intervals. Employment tax is nonmonotonic: it increases between verifications but decreases after a verification. Unemployment benefits are relatively flat between verifications but decrease sharply after a verification. Our quantitative analysis suggests that the optimal monitoring cost is 60 percent of the cost in the current US system. (JEL D82, H24, J64, J65)

Scope of Project

JEL Classification:
      J65 Unemployment Insurance • Severance Pay • Plant Closings
      D82 Asymmetric and Private Information • Mechanism Design
      J64 Unemployment: Models, Duration, Incidence, and Job Search
      H24 Personal Income and Other Nonbusiness Taxes and Subsidies

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Published Versions

V1 [2019-08-03]

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