ECIN Replication Package for "Optimal Unemployment Policy"

This replication package contains Stata and Matlab data files and code to replicate the results from my paper entitled "Optimal Unemployment Policy" in Economic Inquiry. The paper shows that the optimal policy to deal with unemployment features important roles for monitoring of search and job search assistance, as well as more generous unemployment insurance (UI). These results are significantly different from the previous literature, which has overwhelmingly focussed on UI on its own. I incorporate two empirically relevant phenomena that have often been ignored: private consumption smoothing and fiscal externalities from income taxes. I estimate a job search model using indirect inference on data from the March CPS, and simulate the model to evaluate a variety of policy reforms.