Unemployment Insurance for Households: A Sufficient Statistics Approach

Unemployment benefits and contributions are often uniform across partnered and single individuals. In this paper, we study whether this constitutes an optimal policy, given that partners within couples benefit from risk sharing. Our contribution is threefold. First, we document the channels through which unemployment benefits have a first-order impact on aggregate welfare. Second, we express the welfare impact in terms of a few sufficient statistics, which can be derived from observational data. Third, we quantify the optimal policy in an empirical application using US data.