ANALYZING THE NON TAKE-UP OF THE UNEMPLOYMENT INSURANCE

This paper provides a theoretical model for explaining the empirical evidence of unemployment insurance non take-up. Our framework is focused on four determinants of take-up: the monetary incentives, the imperfect information about the eligibility rules, the administrative difficulties to make a claim and the non-monetary incentives such as the effectiveness of the unemployment agency as a search method. Our model accounts for the dynamics of take-up and the endogenous link between job search and benefit claiming. We show that the existence of non take-up may affect the evaluation of unemployment insurance systems.