{"type":"script","doc_desc":{"producers":[{"name":"Reproducibility WBG","abbr":"DECDI","affiliation":"World Bank - Development Impact Department","role":"Verification and preparation of metadata"}],"prod_date":"2026-01-06","version":"1"},"project_desc":{"authoring_entity":[{"name":"Zoe Leiyu Xie","affiliation":"World Bank","email":"lxie@worldbank.org"},{"name":"Pei Cheng Yu","affiliation":"University of New South Wales","email":"pei-cheng.yu@unsw.edu.au"}],"title_statement":{"title":"Reproducibility package for Temptation, Self-Control, And The Design Of Optimal Unemployment Insurance","idno":"RR_WLD_2025_494"},"data_statement":"The package does not rely on external data, as the scripts generate the necessary data through simulations.","software":[{"name":"MATLAB","version":"2024b"}],"scripts":[{"title":"Reproducibility package for Temptation, Self-Control, And The Design Of Optimal Unemployment Insurance","date":"2026-01","notes":"Computational reproducibility verified by Development Impact (DECDI) Analytics team, World Bank.","instructions":"See README in reproducibility package.","file_name":"RR_WLD_2025_494","zip_package":"RR_WLD_2025_494.zip"}],"repository_uri":[{"name":"Reproducible Research Repository (World Bank)","uri":"https:\/\/reproducibility.worldbank.org"}],"production_date":"2026-01-06","abstract":"This paper studies how the unemployment insurance system should be designed when considering costly self-control. The standard optimal unemployment insurance with dynamic moral hazard features declining benefits over the unemployment spell, without a lower bound on consumption (\u201cimmiseration\u201d). As documented in the empirical literature, unemployed workers may be tempted to undervalue the future benefits of job search. The paper models this behavioral bias using costly self-control---a utility cost incurred when a worker\u2019s job search choice deviates from the choice that maximizes current period utility and disregards future utility. Compared with the standard setup with moral hazard alone and without behavioral bias, the optimal system features lower benefit levels, a less rapid decline in benefits over the unemployment spell, a lower bound on consumption for the unemployed, and a one-time reward when a worker returns to work. The findings suggest that food assistance benefits and a back-to-work bonus in many U.S. states are broadly in line with such an optimal unemployment system.","geographic_units":[{"name":"World","code":"WLD"}],"keywords":[{"name":"Unemployment Insurance"},{"name":"Basic Income"},{"name":"Job Search"},{"name":"Temptation"},{"name":"Self-Control"},{"name":"Moral Hazard"},{"name":"Dynamic Contracting"},{"name":"Immiseration"}],"topics":[{"id":"D82","uri":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel","vocabulary":"Journal of Economic Literature (JEL)","name":"Asymmetric and Private Information \u2022 Mechanism Design","parent_id":"D8"},{"id":" H53","uri":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel","vocabulary":"Journal of Economic Literature (JEL)","name":"Government Expenditures and Welfare Programs","parent_id":"H5"},{"id":" I38","uri":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel","vocabulary":"Journal of Economic Literature (JEL)","name":"Government Policy \u2022 Provision and Effects of Welfare Programs","parent_id":"I3"},{"id":" J65","uri":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel","vocabulary":"Journal of Economic Literature (JEL)","name":"Unemployment Insurance \u2022 Severance Pay \u2022 Plant Closings","parent_id":"J6"},{"id":" J68","uri":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel","vocabulary":"Journal of Economic Literature (JEL)","name":"Public Policy","parent_id":"J6"}],"output":[{"type":"Working Paper","description":"Policy Research Working Papers (PRWP) 11265","title":"Temptation, Self-Control, And The Design Of Optimal Unemployment Insurance","uri":"http:\/\/documents.worldbank.org\/curated\/en\/099056212012530317"}],"language":[{"name":"English","code":"EN"}],"technology_requirements":"Runtime: 10 minutes","disclaimer":"The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development\/The World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.","license":[{"name":"Modified BSD3","uri":"https:\/\/opensource.org\/license\/bsd-3-clause\/"}],"contacts":[{"name":"Zoe Leiyu Xie","affiliation":"World Bank","email":"lxie@worldbank.org"},{"name":"Reproducibility WBG","affiliation":"World Bank","email":"reproducibility@worldbank.org"}],"reproduction_instructions":"The reproducibility package is currently embargoed; therefore, users are not able to reproduce the findings at this time.\n- The report validating the replicators\u2019 results is included in the `Downloads` section of this entry.\n- Once the paper is published in a journal, the embargo will be lifted.\n- After the package is published, new users should open the main script `main.m` and run the code to reproduce the results.\n","technology_environment":"Paper exhibits were reproduced on a computer with the following specifications:\n\u2022 OS: Windows 11 Enterprise\n\u2022 Processor: Intel(R) Core(TM) i5-1145G7 CPU @ 2.60GHz\n\u2022 Memory available: 15.7 GB"},"tags":[{"tag":"DOI"},{"tag":"Open Code"},{"tag":"Open Data"},{"tag":"Restricted Code"}],"schematype":"script"}