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Unemployment Insurance and Employment

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  • Deere, Donald R
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    Abstract

    This article examines the impact of unemployment insurance on the allocation of labor across industries. An overlooked aspect of unemployment insurance is the effect of imperfect experience rating on hiring. Firms in more stable industries generally pay more into the unemployment insurance system than their workers ever receive in benefits, thus subsidizing more volatile industries. The results indicate that industry employment shares are significantly affected by unemployment insurance and that there is a net shift of resources from the service industry to the construction industry. The estimates also imply that layoff unemployment is increased by about 5 percent because of unemployment-insurance-induced employment shifts. Copyright 1991 by University of Chicago Press.

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    Bibliographic Info

    Article provided by University of Chicago Press in its journal Journal of Labor Economics.

    Volume (Year): 9 (1991)
    Issue (Month): 4 (October)
    Pages: 307-24

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    Handle: RePEc:ucp:jlabec:v:9:y:1991:i:4:p:307-24

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    Web page: http://www.journals.uchicago.edu/JOLE/

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    Cited by:
    1. Wayne Vroman & Stephen A. Woodbury, . "Financing Unemployment Insurance," Upjohn Working Papers and Journal Articles wvsaw14, W.E. Upjohn Institute for Employment Research.
    2. Charlot, Olivier & Malherbet, Franck & Ulus, Mustafa, 2013. "Unemployment Compensation and the Allocation of Labor in Developing Countries," IZA Discussion Papers 7233, Institute for the Study of Labor (IZA).
    3. Cahuc, Pierre & Malherbet, Franck, 2004. "Unemployment compensation finance and labor market rigidity," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 481-501, March.
    4. Katherine Baicker & Claudia Goldin & Lawrence F. Katz, 1998. "A Distinctive System: Origins and Impact of U.S. Unemployment Compensation," NBER Chapters, in: The Defining Moment: The Great Depression and the American Economy in the Twentieth Century, pages 227-264 National Bureau of Economic Research, Inc.
    5. Bruce D. Meyer, 1992. "Policy Lessons from the U.S. Unemployment Experiments," NBER Working Papers 4197, National Bureau of Economic Research, Inc.
    6. Michael Baker & Samuel A. Rea, 1998. "Employment Spells And Unemployment Insurance Eligibility Requirements," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 80-94, February.
    7. Robert M. Hutchens, . "A Path to Good Jobs? Unemployment and Low Wages: The Distribution of Opportunity for Young Unskilled Workers," Economics Public Policy Brief Archive 11, Levy Economics Institute.
    8. Wayne Vroman & Stephen Woodbury, 2014. "Financing Unemployment Insurance," Upjohn Working Papers and Journal Articles 14-207, W.E. Upjohn Institute for Employment Research.

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