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In ow into Unemployment: Employment Spells and Unemployment Insurance

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  • Stepan Jurajda

    (CERGE-EI)

Abstract

This paper uses U.S. micro level data on employment durations to quantify the effect of potential Unemployment Insurance (UI) entitlement on job separations. Economic theory motivates estimation of a competing risk hazard model for quits and layoffs. The estimation procedure simultaneously allows for unobserved heterogeneity, defective risks and sample selection into future spells. It also uses alternative assumptions about agents' ability to determine eligibility for future UI claims. Empirical results suggest that being entitled to UI compensation raises the layoff hazard, but workers with higher levels of potential UI entitlement do not appear to be more likely to get laid off.

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File URL: http://128.118.178.162/eps/lab/papers/0012/0012008.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Labor and Demography with number 0012008.

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Length: 39 pages
Date of creation: 23 Feb 2001
Date of revision:
Handle: RePEc:wpa:wuwpla:0012008

Note: Type of Document - Acrobat PDF; pages: 39 ; figures: included
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Web page: http://128.118.178.162

Related research

Keywords: Employment durations; Unemployment insurance; Unmeasured heterogeneity; Defective risks; Sample selection.;

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References

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  1. Guido W. Imbens & Lisa M. Lynch, 1993. "Re-Employment Probabilities over the Business Cycle," NBER Working Papers 4585, National Bureau of Economic Research, Inc.
  2. Peter Schmidt & Ann Dryden Witte, 1987. "Predicting Criminal Recidivism Using "Split Population" Survival Time Models," NBER Working Papers 2445, National Bureau of Economic Research, Inc.
  3. Azariadis, Costas, 1975. "Implicit Contracts and Underemployment Equilibria," Journal of Political Economy, University of Chicago Press, vol. 83(6), pages 1183-1202, December.
  4. Ham, John C & Rea, Samuel A, Jr, 1987. "Unemployment Insurance and Male Unemployment Duration in Canada," Journal of Labor Economics, University of Chicago Press, vol. 5(3), pages 325-53, July.
  5. Pissarides, Christopher A, 1982. "Job Search and the Duration of Layoff Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 595-612, November.
  6. Jovanovic, Boyan, 1979. "Firm-specific Capital and Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1246-60, December.
  7. Katz, Lawrence F & Meyer, Bruce D, 1990. "Unemployment Insurance, Recall Expectations, and Unemployment Outcomes," The Quarterly Journal of Economics, MIT Press, vol. 105(4), pages 973-1002, November.
  8. John Haltiwanger, 1982. "The Distinguishing Characteristics of Temporary and Permanent Layoffs," UCLA Economics Working Papers 273, UCLA Department of Economics.
  9. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-82, July.
  10. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  11. Christofides, Louis N & McKenna, C J, 1996. "Unemployment Insurance and Job Duration in Canada," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 286-312, April.
  12. Michael Baker & Rea Samuel A. Rea, 1995. "Employment Spells and Unemployment Insurance Eligibility Requirements," Labor and Demography 9505001, EconWPA.
  13. 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, vol. 64(1), pages 175-205, January.
  14. Feldstein, Martin S, 1976. "Temporary Layoffs in the Theory of Unemployment," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 937-57, October.
  15. Card, David & Levine, Phillip B., 1994. "Unemployment insurance taxes and the cyclical and seasonal properties of unemployment," Journal of Public Economics, Elsevier, vol. 53(1), pages 1-29, January.
  16. 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.
  17. Heckman, James J & Walker, James R, 1990. "The Relationship between Wages and Income and the Timing and Spacing of Births: Evidence from Swedish Longitudinal Data," Econometrica, Econometric Society, vol. 58(6), pages 1411-41, November.
  18. Topel, Robert H, 1983. "On Layoffs and Unemployment Insurance," American Economic Review, American Economic Association, vol. 73(4), pages 541-59, September.
  19. Patricia M. Anderson & Bruce D. Meyer, 1994. "The Effects of Unemployment Insurance Taxes and Benefits on Layoffs Using Firm and Individual Data," NBER Working Papers 4960, National Bureau of Economic Research, Inc.
  20. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9.
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Cited by:
  1. Stepan Jurajda, 2001. "Unemployment Outflow and Unemployment Insurance Taxes," Labor and Demography 0012005, EconWPA.

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