Extended Benefits and the Duration of UI Spells: Evidence from the New Jersey Extended Benefit Program

No 6714, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In 1996 a political trade-off in the New Jersey legislature led to a six-month program that provided up to 13 additional weeks of exhausted their regular benefit entitlement. We use this unique episode to provide new evidence on the effect of changes in the duration of unemployment insurance (UI) benefits on the behavior of UI claimants. Unlike most benefit extensions, the New Jersey Extended Benefit (NJEB) program arose during a period of stable economic conditions, allowing us to sidestep the important issue of endogenous policy adoption. We use aggregate state-level data and administrative records for individual UI claimants from before, during, and after the NJEB program to estimate its impact on unemployment spell lengths. Overall, we find that the NJEB program raised the fraction of UI claimants who exhausted their regular benefits by 1-3 percentage points. More importantly, however, we find that the short-term nature of the benefit extension substantially moderated its effect. For individuals who were receiving UI when the benefit extension was passed, we estimate that the rate of leaving UI fell by about 15 percent. Simulations suggest that if the program had run long enough to affect UI claimants from the first day of their spell, the fraction of recipients exhausting regular benefits would have risen by 7 percentage points, and the average recipient would have collected about one extra week or regular benefits.

JEL-codes: J6 (search for similar items in EconPapers)
Date: 1998-08
New Economics Papers: this item is included in nep-ltv, nep-pbe and nep-pub
Note: LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published as Card, David and Phillip B. Levine. "Extended Benefits And The Duration Of UI Spells: Evidence From The New Jersey Extended Benefit Program," Journal of Public Economics, 2000, v78(1-2,Oct), 107-138.

Downloads: (external link)
http://www.nber.org/papers/w6714.pdf (application/pdf)

Related works:
Journal Article: Extended benefits and the duration of UI spells: evidence from the New Jersey extended benefit program (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:6714

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w6714

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().