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Unemployment durations and extended unemployment benefits in local labor markets

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  • Stepan Jurajda
  • Frederick J. Tannery

Abstract

Many empirical studies have confirmed the theoretical prediction that longer-term Unemployment Insurance (UI) entitlement leads to longer unemployment duration. Most of those studies have examined special programs that provide extra weeks of unemployment benefits when unemployment rates in the region are higher. Hence, they must distinguish if the longer unemployment duration among UI claimants observed in these cases is due to the extended benefits or to the adverse labor market conditions that trigger those extensions. In contrast, this paper measures the effect of identical entitlement extensions across two labor markets facing very different demand conditions-Pittsburgh and Philadelphia, over the years 1980-85. The results confirm findings of the existing literature and indicate that the adverse effect of longer entitlement changes relatively little in response to variation in demand conditions. (Author's abstract.)

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Bibliographic Info

Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 56 (2003)
Issue (Month): 2 (January)
Pages: 324-348

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Handle: RePEc:ilr:articl:v:56:y:2003:i:2:p:324-348

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References

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  1. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, Econometric Society, vol. 58(4), pages 757-82, July.
  2. Berg, G.J. van den, 1987. "Nonstationarity in job search theory," Research Memorandum, Tilburg University, Faculty of Economics and Business Administration 242, Tilburg University, Faculty of Economics and Business Administration.
  3. Ham, John C & Rea, Samuel A, Jr, 1987. "Unemployment Insurance and Male Unemployment Duration in Canada," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 5(3), pages 325-53, July.
  4. Lawrence F. Katz & Bruce D. Meyer, 1988. "The Impact of the Potential Duration of Unemployment Benefits on the Duration of Unemployment," NBER Working Papers 2741, National Bureau of Economic Research, Inc.
  5. Dale Mortensen, 1984. "Job Search and Labor Market Analysis," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 594, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  6. Anderson, Patricia M, 1992. "Time-Varying Effects of Recall Expectation, a Reemployment Bonus, and Job Counseling on Unemployment Durations," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 10(1), pages 99-115, January.
  7. Guido Imbens & Lisa Lynch, 2006. "Re-employment probabilities over the business cycle," Portuguese Economic Journal, Springer, Springer, vol. 5(2), pages 111-134, August.
  8. Ham, John C & LaLonde, Robert J, 1996. "The Effect of Sample Selection and Initial Conditions in Duration Models: Evidence from Experimental Data on Training," Econometrica, Econometric Society, Econometric Society, vol. 64(1), pages 175-205, January.
  9. Han, Aaron & Hausman, Jerry A, 1990. "Flexible Parametric Estimation of Duration and Competing Risk Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 5(1), pages 1-28, January-M.
  10. Pissarides, Christopher A, 1982. "Job Search and the Duration of Layoff Unemployment," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 97(4), pages 595-612, November.
  11. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
  12. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, Elsevier, vol. 28(1), pages 85-101, April.
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Cited by:
  1. Randall W. Eberts & Christopher J. O'Leary, 2003. "A New WPRS Profiling Model for Michigan," Book chapters authored by Upjohn Institute researchers, W.E. Upjohn Institute for Employment Research, in: Joshua Riley & Aquila Branch & Stephen Wandner & Wayne Gordon (ed.), A Compilation of Selected Papers from the Employment and Training Administration's 2003 Biennial National Research Conference, ETA Occasional Paper 20, pages 130-184 W.E. Upjohn Institute for Employment Research.
  2. Torben M. Andersen & Michael Svarer, 2010. "Business Cycle Dependent Unemployment Insurance," Economics Working Papers, School of Economics and Management, University of Aarhus 2010-16, School of Economics and Management, University of Aarhus.
  3. Moyen, Stéphane & Stähler, Nikolai, 2009. "Unemployment insurance and the business cycle: prolong benefit entitlements in bad times?," Discussion Paper Series 1: Economic Studies 2009,30, Deutsche Bundesbank, Research Centre.
  4. Stepan Jurajda, 1999. "Unemployment Outflow and Unemployment Insurance Taxes," CERGE-EI Working Papers wp143, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  5. Pascal Michaillat & Emmanuel Saez & Camille Landais, 2011. "Optimal Unemployment Insurance over the Business Cycle," 2011 Meeting Papers 124, Society for Economic Dynamics.
  6. Polachek, Solomon & Xiang, Jun, 2005. "The Effects of Incomplete Employee Wage Information: A Cross-Country Analysis," IZA Discussion Papers 1735, Institute for the Study of Labor (IZA).
  7. Valletta, Robert G., 2014. "Recent extensions of U.S. unemployment benefits: search responses in alternative labor market states," Working Paper Series, Federal Reserve Bank of San Francisco 2014-13, Federal Reserve Bank of San Francisco.
  8. Valletta, Robert G., 2014. "Recent Extensions of U.S. Unemployment Benefits: Search Responses in Alternative Labor Market States," IZA Discussion Papers 8247, Institute for the Study of Labor (IZA).
  9. Matthew Webb & Arthur Sweetman & Casey Warman, 2014. "How Targeted is Targeted Tax Relief? Evidence from the Unemployment Insurance Youth Hires Program," Working Papers, Queen's University, Department of Economics 1298, Queen's University, Department of Economics.
  10. Tuulia Hakola, 2000. "Navigating through the Finnish Pension System," Discussion Papers, Government Institute for Economic Research Finland (VATT) 224, Government Institute for Economic Research Finland (VATT).
  11. Duncan McVicar & Jan M. Podivinsky, 2010. "Are Active Labour Market Programmes Least Effective Where They Are Most Needed? The Case of the British New Deal for Young People," Melbourne Institute Working Paper Series, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne wp2010n16, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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