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The Long-Term Effects of UI Extensions on Employment

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  • Johannes F. Schmieder
  • Till von Wachter
  • Stefan Bender

Abstract

The majority of papers analyzing the employment effects of unemployment insurance (UI) benefit durations focus on the duration of the first unemployment spell. In this paper, we make two contributions. First, we use a regression discontinuity design to analyze the long-term effects of extensions in UI durations. These estimates differ from standard estimates in that they incorporate differences in UI benefit receipt and employment due to recurrent unemployment spells. Second, we derive a welfare formula of UI extensions that incorporates recurrent nonemployment spells.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.102.3.514
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 102 (2012)
Issue (Month): 3 (May)
Pages: 514-19

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Handle: RePEc:aea:aecrev:v:102:y:2012:i:3:p:514-19

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  1. Blanchard, O.J. & Diamond, P., 1990. "Ranking, Unemployment Duration, And Wages," Working papers 546, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Raj Chetty, 2008. "Erratum: Moral Hazard versus Liquidity and Optimal Unemployment Insurance," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 1197-1197, December.
  3. Thomas Lemieux & W. Bentley MacLeod, 1997. "Supply Side Hysteresis: The Case of the Canadian Unemployment Insurance System," Boston College Working Papers in Economics 340., Boston College Department of Economics.
  4. 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.
  5. Chetty, Raj, 2008. "Moral Hazard versus Liquidity and Optimal Unemployment Insurance," Scholarly Articles 9751256, Harvard University Department of Economics.
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Cited by:
  1. Kambayashi, Ryo & Kato, Takao, 2012. "Good Jobs, Bad Jobs, and the Great Recession: Lessons from Japan's Lost Decade," IZA Discussion Papers 6666, Institute for the Study of Labor (IZA).
  2. Tatsiramos, Konstantinos & van Ours, Jan C., 2012. "Labor Market Effects of Unemployment Insurance Design," IZA Discussion Papers 6950, Institute for the Study of Labor (IZA).
  3. Springer, Angelina, 2013. "Selbstständige Leistungsbezieher in der Arbeitslosenversicherung : empirische Befunde zum Versicherungspflichtverhältnis auf Antrag," IAB-Forschungsbericht 201315, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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