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Does Reducing Unemployment Benefits during a Recession Reduce Youth Unemployment?: Evidence from a 50 Percent Cut in Unemployment Assistance

Author

Listed:
  • Aedín Doris
  • Donal O’Neill
  • Olive Sweetman

Abstract

We use administrative data to examine the effect of a 50 percent benefit cut for young unemployed claimants in Ireland during the Great Recession. Because the cut applied only to new spells, claimants whose unemployment start dates differed by one day received very different benefits; we exploit this feature in a regression discontinuity analysis. We find that the benefit cut significantly reduced unemployment duration, with exits to training and work accounting for the majority of this effect.

Suggested Citation

  • Aedín Doris & Donal O’Neill & Olive Sweetman, 2020. "Does Reducing Unemployment Benefits during a Recession Reduce Youth Unemployment?: Evidence from a 50 Percent Cut in Unemployment Assistance," Journal of Human Resources, University of Wisconsin Press, vol. 55(3), pages 902-925.
    • Handle: RePEc:uwp:jhriss:v:55:y:2020:i:3:p:902-925
    Note: DOI: 10.3368/jhr.55.4.0518-9501R1
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    Citations

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    Cited by:

    1. Camarero Garcia, Sebastian & Hansch, Michelle, 2020. "The effect of unemployment insurance benefits on (self-)employment: Two sides of the same coin?," ZEW Discussion Papers 20-062, ZEW - Leibniz Centre for European Economic Research.
    2. Renaud Bourlès & Anastasia Cozarenco & Dominique Henriet & Xavier Joutard, 2022. "Business Training with a Better-Informed Lender: Theory and Evidence from Microcredit in France," Annals of Economics and Statistics, GENES, issue 148, pages 65-108.
    3. Tomi Kyyrä, 2023. "The effects of unemployment assistance on unemployment exits," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(6), pages 1457-1480, December.
    4. Camarero Garcia, Sebastian & Murmann, Martin, 2020. "Unemployment benefit duration and startup success," ZEW Discussion Papers 20-033, ZEW - Leibniz Centre for European Economic Research.

    More about this item

    JEL classification:

    • 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
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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