government provision of unemployment insurance.
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I. unemployment insurance is an employer paid government program that provides laid-off workers with benefits worth some proportion of their previous wages (Texas-25%) for some limited amount of time (Texas-26 weeks).
II. For the purpose of this assignment ignore the Macroeconomic arguments for and against increased government spending/transfers during a recession.
answer the following essay question
Applying the basic concepts of the reasons for (risk aversion) and common market failures (adverse selection, moral hazard) in the insurance market explain the Microeconomic case for government provision of unemployment insurance.
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