Measuring the equilibrium effects of unemployment benefits dispersion

We analyse the impact of unemployment benefits and minimum wages using an e quilibrium search model which allows for dispersion of benefits and product ivity levels, job-to-job transitions, and structural and frictional unemplo yment. The estimation method uses readily available aggregate data on margi nal distributions of unemployment durations as well as wages and benefit le vels. Different causes of structural and frictional unemployment are invest igated. We investigate the efficiency of the imposition of a single benefit level for all household types and the introduction of a tax credit on earn ed income. Copyright (C) 2000 John Wiley & Sons, Ltd.