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Unemployment benefits and unemployment

Author

Listed:
  • Robert A. Moffitt

    (Johns Hopkins University, USA, and IZA, Germany)

Abstract
All developed economies have unemployment benefit programs to protect workers against major income losses during spells of unemployment. By enabling unemployed workers to meet basic consumption needs, the programs protect workers from having to sell their assets or accept jobs below their qualifications. The programs also help stabilize the economy during recessions. If benefits are too generous, however, the programs can lengthen unemployment and raise the unemployment rate. The policy challenge is to protect workers while minimizing undesirable side effects.

Suggested Citation

  • Robert A. Moffitt, 2014. "Unemployment benefits and unemployment," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-13, May.
    • Handle: RePEc:iza:izawol:journl:y:2014:n:13
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    References listed on IDEAS

    as
    1. Henry S. Farber & Robert G. Valletta, 2015. "Do Extended Unemployment Benefits Lengthen Unemployment Spells?: Evidence from Recent Cycles in the U.S. Labor Market," Journal of Human Resources, University of Wisconsin Press, vol. 50(4), pages 873-909.
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    6. Rafael Lalive & Jan Van Ours & Josef Zweimuller, 2006. "How Changes in Financial Incentives Affect the Duration of Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(4), pages 1009-1038.
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    8. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392, Elsevier.
    9. Johannes F. Schmieder & Till von Wachter & Stefan Bender, 2012. "The Effects of Extended Unemployment Insurance Over the Business Cycle: Evidence from Regression Discontinuity Estimates Over 20 Years," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(2), pages 701-752.
    10. Arash Nekoei & Andrea Weber, 2017. "Does Extending Unemployment Benefits Improve Job Quality?," American Economic Review, American Economic Association, vol. 107(2), pages 527-561, February.
    11. Browning, Martin & Crossley, Thomas F., 2001. "Unemployment insurance benefit levels and consumption changes," Journal of Public Economics, Elsevier, vol. 80(1), pages 1-23, April.
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    14. repec:pri:indrel:dsp01th83kz40p is not listed on IDEAS
    15. Marta C. Lopes, 2022. "A review on the elasticity of unemployment duration to the potential duration of unemployment benefits," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1212-1224, September.
    16. Johannes F. Schmieder† & Till von Wachter & Stefan Bender, 2011. "The Effects Of Extended Unemployment Insurance Over The Business Cycle: Evidence From Regression Discontinuity Estimates Over Twenty Years," Boston University - Department of Economics - Working Papers Series WP2011-063, Boston University - Department of Economics.
    17. Johannes F. Schmieder & Till von Wachter & Stefan Bender, 2016. "The Effect of Unemployment Benefits and Nonemployment Durations on Wages," American Economic Review, American Economic Association, vol. 106(3), pages 739-777, March.
    18. Gruber, Jonathan, 1997. "The Consumption Smoothing Benefits of Unemployment Insurance," American Economic Review, American Economic Association, vol. 87(1), pages 192-205, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Moffitt, Robert & Ziliak, James, 2020. "COVID-19 and the U.S. Social Safety Net," Economics Working Paper Archive 64317, The Johns Hopkins University,Department of Economics.
    2. Robert A. Moffitt & James P. Ziliak, 2020. "COVID‐19 and the US Safety Net," Fiscal Studies, John Wiley & Sons, vol. 41(3), pages 515-548, September.
    3. World Bank & Coll-Black,Sarah & Von Lenthe,Cornelius Claus & Koettl-Brodmann,Stefanie, 2023. "Social Protection in a World of Crisis : Learning from the Response to the COVID-19 Pandemicin Eastern Europe and the South Caucasus," Social Protection Discussion Papers and Notes 183521, The World Bank.
    4. Groves, Jeremy & Wilcox, Virginia, 2023. "The impact of overweight and obesity on unemployment duration among young American workers," Economics & Human Biology, Elsevier, vol. 51(C).
    5. Rainer Eppel & Marian Fink & Helmut Mahringer, 2016. "Die Wirkung zentraler Interventionen des AMS im Prozess der Vermittlung von Arbeitslosen," WIFO Studies, WIFO, number 59029.
    6. Rainer Eppel & Helmut Mahringer, 2019. "Getting a lot out of a little bit of work? The effects of marginal employment during unemployment," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(2), pages 381-408, May.

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    More about this item

    Keywords

    unemployment benefits; unemployment; recessions;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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