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Disemployment Effects of Unemployment Insurance: A Meta-analysis

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  • Jonathan P. Cohen
  • Peter Ganong

Abstract

We systematically review studies of how unemployment benefits affect unemployment duration. Statistically significant findings are eight times more likely to be published. Correcting for publication bias cuts the average elasticity by a third. Meta-analysis is a data-driven way to aggregate estimates across policy contexts and generalize sufficient statistics methods to compute the global optimal policy. Although existing consumption drop-based approaches typically imply an optimal replacement rate near zero, our corrected estimate simply an optimal replacement rate of 28 percent in the United States. We are unable to reject the hypothesis that the "micro" elasticity is equal to the "macro" elasticity.

Suggested Citation

  • Jonathan P. Cohen & Peter Ganong, 2026. "Disemployment Effects of Unemployment Insurance: A Meta-analysis," American Economic Review: Insights, American Economic Association, vol. 8(1), pages 1-18, March.
    • Handle: RePEc:aea:aerins:v:8:y:2026:i:1:p:1-18
    DOI: 10.1257/aeri.20240441
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    References listed on IDEAS

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    1. Johannes F. Schmieder & Till von Wachter & Stefan Bender, 2012. "The Effects of Extended Unemployment Insurance Over the Business Cycle: Evidence from Regression Discontinuity Estimates Over 20 Years," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(2), pages 701-752.
    2. Fackler, Daniel & Stegmaier, Jens & Weigt, Eva, 2019. "Does extended unemployment benefit duration ameliorate the negative employment effects of job loss?," Labour Economics, Elsevier, vol. 59(C), pages 123-138.
    3. David Card & Raj Chetty & Andrea Weber, 2007. "Cash-on-Hand and Competing Models of Intertemporal Behavior: New Evidence from the Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1511-1560.
    4. Uusitalo, Roope & Verho, Jouko, 2010. "The effect of unemployment benefits on re-employment rates: Evidence from the Finnish unemployment insurance reform," Labour Economics, Elsevier, vol. 17(4), pages 643-654, August.
    5. Johannes F. Schmieder† & Till von Wachter & Stefan Bender, 2011. "The Effects Of Extended Unemployment Insurance Over The Business Cycle: Evidence From Regression Discontinuity Estimates Over Twenty Years," Boston University - Department of Economics - Working Papers Series WP2011-063, Boston University - Department of Economics.
    6. Bruce D. Meyer & Wallace K. C. Mok, 2014. "A Short Review of Recent Evidence on the Disincentive Effects of Unemployment Insurance and New Evidence From New York State," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(1), pages 219-252, March.
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    Cited by:

    1. Nikolai Cook, František Bartoš, Pedro R. D. Bom, Sebastian Gechert, Klára Kantová, Jerome Geyer-Klingeberg, Tomáš Havránek, Zuzana Irsova, Martina Luskova, Matěj Opatrný, Franz Prante, Heiko , 2026. "Guidance for the Use of AI in the Meta-Analysis of Economics Research," LCERPA Working Papers jc0161, Laurier Centre for Economic Research and Policy Analysis, revised Mar 2026.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • 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

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