A hallmark of modern labor economics is the close interplay between the development
of theory, data sources and econometric testing. The evolution of the economic analysis
of unemployment insurance provides a good illustration. New theoretical approaches,
in particular job-search theory, have inspired a large amount of empirical research,
some of it methodologically innovative and most of it highly relevant for economic
policy. The paper presents a broad survey and an assessment of the economic analysis
of unemployment insurance as it has evolved since the 1970s.