Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut

Working Papers from Princeton University, Department of Economics, Industrial Relations Section.

Abstract: In this paper we examine how an unanticipated cut in potential unemployment insurance (UI) duration, which reduced maximum duration in Missouri by 16 weeks, affected the search behavior of UI recipients and the aggregate labor market. Using a regression discontinuity design (RDD), we estimate that a one-month reduction in maximum duration is associated with 15 fewer days of UI receipt and 8.6 fewer days of nonemployment. We use the RDD estimates to simulate the change in the time path of the unemployment rate assuming there are no market-level externalities. The simulated response closely approximates the estimated change in the unemployment rate following the benefit cut, suggesting that even in a period of high unemployment, the labor market was able to absorb this influx of workers without crowding out other jobseekers.

JEL-codes: J65 (search for similar items in EconPapers)
Date: 2015-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
https://dataspace.princeton.edu/bitstream/88435/dsp014f16c5130/4/590.pdf
Our link check indicates that this URL is bad, the error code is: 500 Internal Server Error

Related works:
Working Paper: Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut (2020)
Journal Article: Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut (2018)
Working Paper: Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut (2016)
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:pri:indrel:590

Access Statistics for this paper

More papers in Working Papers from Princeton University, Department of Economics, Industrial Relations Section. Contact information at EDIRC.
Bibliographic data for series maintained by Bobray Bordelon ().