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Employment Spells and Unemployment Insurance Eligibility Requirements

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Author Info
Michael Baker (University of Toronto)
Rea Samuel A. Rea (University of Toronto)

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Abstract

In this paper we examine whether the requirements which workers must satisfy to qualify for UI benefits in any succeeding period of joblessness affect the duration of employment spells. This behavioral consequence of a UI system has been neglected in empirical research, which has instead focused on the effects of UI parameters on the actions of the unemployed. The effect is identified by a unique change in the eligibility requirements of the Canadian UI system in 1990, which is orthogonal to changes in the economic environment. We find a significant increase in the employment hazard in the week that an individual satisfies the eligibility requirement in many regions of the country. In the spirit of Feldstein's (1976) study of temporary layoffs, the results provide new evidence of the impact of UI system parameters on the actions of employers and workers.

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Paper provided by EconWPA in its series Labor and Demography with number 9505001.

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Date of creation: 29 May 1995
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Handle: RePEc:wpa:wuwpla:9505001

Note: PS 42 pp JEL Classification: J2
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J - Labor and Demographic Economics

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. 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. [Downloadable!] (restricted)
  2. 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. [Downloadable!] (restricted)
  3. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-82, July. [Downloadable!] (restricted)
    Other versions:
  4. Gary Burtless, 1983. "Why Is Insured Unemployment So Low?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 14(1983-1), pages 225-254. [Downloadable!]
  5. Gary Solon, 1983. "The Effects of Unemployment Insurance Eligibility Rules on Job Quitting Behavior," Working Papers 541, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  6. Topel, Robert H, 1983. "On Layoffs and Unemployment Insurance," American Economic Review, American Economic Association, vol. 73(4), pages 541-59, September. [Downloadable!] (restricted)
  7. Green, D.A. & Riddell, W.C., 1993. "Qualifying for Unemployment Insurance: An Empirical Analysis," UBC Departmental Archives 93-33, UBC Department of Economics.
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  8. Gunderson, Morley & Melino, Angelo, 1990. "The Effects of Public Policy on Strike Duration," Journal of Labor Economics, University of Chicago Press, vol. 8(3), pages 295-316, July. [Downloadable!] (restricted)
  9. Hamermesh, Daniel S, 1979. "Entitlement Effects, Unemployment Insurance and Employment Decisions," Economic Inquiry, Oxford University Press, vol. 17(3), pages 317-32, July.
  10. repec:fth:prinin:297 is not listed on IDEAS
  11. David Card, 1992. "A Comparative Analysis of Unemployment in Canada and the United States," Working Papers 677, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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  12. 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. [Downloadable!] (restricted)
  13. Mortensen, Dale T, 1988. "Wages, Separations, and Job Tenure: On-the-Job Specific Training or Matching?," Journal of Labor Economics, University of Chicago Press, vol. 6(4), pages 445-71, October. [Downloadable!] (restricted)
  14. Chesher, Andrew D, 1984. "Testing for Neglected Heterogeneity," Econometrica, Econometric Society, vol. 52(4), pages 865-72, July. [Downloadable!] (restricted)
  15. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, vol. 28(1), pages 85-101, April. [Downloadable!] (restricted)
  16. Deere, Donald R, 1991. "Unemployment Insurance and Employment," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 307-24, October. [Downloadable!] (restricted)
  17. Katz, Lawrence F. & Meyer, Bruce D., 1990. "The impact of the potential duration of unemployment benefits on the duration of unemployment," Journal of Public Economics, Elsevier, vol. 41(1), pages 45-72, February. [Downloadable!] (restricted)
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  18. Riddell, W.C. & Card, D., 1992. "A Comparative Analysis of Unemployment in Canada and United States," UBC Departmental Archives 92-07, UBC Department of Economics.
  19. Nickell, Stephen J, 1979. "Estimating the Probability of Leaving Unemployment," Econometrica, Econometric Society, vol. 47(5), pages 1249-66, September. [Downloadable!] (restricted)
  20. White, Halbert, 1982. "Maximum Likelihood Estimation of Misspecified Models," Econometrica, Econometric Society, vol. 50(1), pages 1-25, January. [Downloadable!] (restricted)
  21. Solon, Gary R, 1985. "Work Incentive Effects of Taxing Unemployment Benefits," Econometrica, Econometric Society, vol. 53(2), pages 295-306, March. [Downloadable!] (restricted)
    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hägglund, Pathric, 2007. "Effects of Changes in the Unemployment Insurance Eligibility Requirements on Job Duration - Swedish Evidence," Working Paper Series 3/2007, Swedish Institute for Social Research. [Downloadable!]
  2. Tatsiramos, Konstantinos, 2004. "The Effect of Unemployment Insurance on Unemployment Duration and the Subsequent Employment Stability," IZA Discussion Papers 1163, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Bernard Fortin & Guy Lacroix, 1997. "Welfare Benefits, Minimum Wage Rate and the Duration of Welfare Spells: Evidence from a Natural Experiment in Canada," CIRANO Working Papers 97s-25, CIRANO. [Downloadable!]
    Other versions:
  4. Michele Campolieti & John N. Lavis, 2000. "Disability Expenditures in Canada, 1970-1996: Trends, Reform Efforts and a Path for the Future," Canadian Public Policy, University of Toronto Press, vol. 26(2), pages 241-164, June. [Downloadable!] (restricted)
  5. Jurajda, Stepán, 2001. "Estimating the Effect of Unemployment Insurance Compensation on the Labor Market Histories of Displaced Workers," IZA Discussion Papers 294, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Michele Campolieti, 2003. "On the estimation of hazard models with flexible baseline hazards and nonparametric unobserved heterogeneity," Economics Bulletin, Economics Bulletin, vol. 3(24), pages 1-10. [Downloadable!]
  7. Belzil, Christian, 2000. "Unemployment Insurance and Subsequent Job Duration: Job Matching vs Unobserved Heterogeneity," IZA Discussion Papers 116, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  8. Konstantinos Tatsiramos, 2006. "Unemployment Insurance in Europe: Unemployment Duration and Subsequent Employment Stability," IZA Discussion Papers 2280, Institute for the Study of Labor (IZA). [Downloadable!]
  9. Rafael Lalive & Josef Zweimueller, 2002. "Benefit Entitlement and the Labor Market: Evidence from a Large-Scale Policy Change," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  10. Michael Baker & Angelo Melino, 1999. "Duration Dependence and Nonparametric Heterogeneity: A Monte Carlo Study," Working Papers melino-99-01, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
  11. Michele Campolieti, 2001. "Bayesian semiparametric estimation of discrete duration models: an application of the dirichlet process prior," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(1), pages 1-22. [Downloadable!]
  12. John P. Haisken-DeNew & Matthias Vorell, 2009. "Killing them with Kindness: Negative Distributional Externalities of Increasing UI Benefits," Ruhr Economic Papers 0121, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen. [Downloadable!]
  13. Stepan Jurajda, 2001. "Unemployment Outflow and Unemployment Insurance Taxes," Labor and Demography 0012005, EconWPA. [Downloadable!]
    Other versions:
  14. Hägglund, Pathric, 2000. "Effects of changes in the unemployment insurance eligibility requirements on job duration - Swedish evidence," Working Paper Series 2000:4, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  15. Stepan Jurajda, 2001. "In ow into Unemployment: Employment Spells and Unemployment Insurance," Labor and Demography 0012008, EconWPA. [Downloadable!]
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