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Unemployment Insurance and Youth Labor Market Behavior in Canada and the United States

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Author Info
Christopher Ferrall

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Abstract

To study how the design of unemployment insurance affects people leaving school to find jobs, a model of job search in the presence of UI is developed and estimated for the U.S. and Canada. The level of UI benefits depends upon previous earnings, a fact which creates opposing incentives for unemployed people not receiving benefits. Reservation wages of uninsured youth are found to be more sensitive to UI eligibility rules than to the length of the benefit period. The estimates are also used to analyze differences in preferences and labor market opportunities within the two countries.

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File URL: http://www.econ.queensu.ca/working_papers/papers/qed_wp_904.pdf
File Format: application/pdf
File Function: First version 1994
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Publisher Info
Paper provided by Queen's University, Department of Economics in its series Working Papers with number 904.

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Date of creation: Jul 1994
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Handle: RePEc:qed:wpaper:904

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Related research
Keywords: unemployment insurance; job search; maximum likelihood estimation;

Find related papers by JEL classification:
J0 - Labor and Demographic Economics - - General
J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

Cited by:
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  1. Richard Archambault & Louis Grignon, 1999. "Decline in Youth Participation in Canada in the 1990s: Structural or Cyclical?," A Symposium on Canadian Labour Force Participation in the 1990s (Special Issue of Canadian Business Economics, Volume 7, Number 2, May 1999), in: Andrew Sharpe & Louis Grignon (ed.), A Symposium on Canadian Labour Force Participation in the 1990s (Special Issue of Canadian Business Economics, Volume 7, Number 2, May 1999), pages 71-87 Centre for the Study of Living Standards. [Downloadable!]
Statistics
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