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

Question

Quizplus · Accepted Answer

An increase in Employment Insurance benefits makes the option of not working more attractive, which in turn increases labour search as individuals are more likely to search for a job that meets their desired criteria while still being able to rely on the increased benefits.

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