In the two-sided search model, an increase in Employment Insurance benefits makes labour search
A) more attractive.
B) equivalent to working.
C) more difficult to monitor.
D) unambiguously decrease.
E) unambiguously increase.

Question

Quizplus · Accepted Answer

An increase in Employment Insurance benefits makes labour search more attractive because it provides a "safety net" for individuals who are unemployed. As a result, they may be more willing to take their time and search for a job that is a better match for their skills and preferences, rather than accepting the first job offer that comes along out of desperation.

In the Two-Sided Search Model, an Increase in Employment Insurance