Voting on unemployment insurance

In this article, we ask heterogeneous agents in a dynamic general equilibri um economy to vote on the generosity of their unemployment insurance progra m. We observe the influence on their vote of (1) moral hazard, (2) private alternatives, and (3) changes in employment status. Agents differ in skills , employment probabilities, income prospects, and assets. For a calibration to the United States, we show that: (1) in contrast to the literature, pla usible levels of moral hazard need not induce large cuts in optimal benefit s. (2) Switching to private insurance is rejected for most status quo, thou gh it would be as generous. (3) Skill groups vote as a block. For reasonabl e discount factors, solidarity is never broken simultaneously for more than one group.