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Do temporary extensions to unemployment insurance benefits matter? The effects of the US standby extended benefit program

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  • Jeremy Schwartz

Abstract

During the 2007--2010 economic downturn, the US temporarily increased the duration of Unemployment Insurance (UI) by 73 weeks, higher than any prior extension, raising concerns about UI's disincentive effects on job search. This article examines the effect of temporary benefit extensions using a Regression Discontinuity (RD) approach that addresses the endogeneity of benefit extensions and labour market conditions. Using data from the 1991 recession, the results indicate that the Stand-by Extended Benefit (SEB) program has a significant, although somewhat limited, impact on county unemployment rates and the duration of unemployment. The results suggest that the temporary nature of SEB benefit extensions may mitigate their effect on search behaviour.

Suggested Citation

  • Jeremy Schwartz, 2013. "Do temporary extensions to unemployment insurance benefits matter? The effects of the US standby extended benefit program," Applied Economics, Taylor & Francis Journals, vol. 45(9), pages 1167-1183, March.
    • Handle: RePEc:taf:applec:45:y:2013:i:9:p:1167-1183
    DOI: 10.1080/00036846.2011.613799
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    References listed on IDEAS

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    1. David S. Lee & Thomas Lemieux, 2009. "Regression Discontinuity Designs In Economics," Working Papers 1118, Princeton University, Department of Economics, Industrial Relations Section..
    2. van Ours, Jan C. & Vodopivec, Milan, 2004. "How Changes in Benefits Entitlement Affect Job-Finding: Lessons from the Slovenian "Experiment"," IZA Discussion Papers 1181, IZA Network @ LISER.
    3. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
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    1. Simoes, Nadia, 2013. "Subsídio de desemprego: uma revisão da literatura teórica e empírica [Unemployment insurance: a survey]," MPRA Paper 52332, University Library of Munich, Germany.
    2. Robert Valletta, 2014. "Recent extensions of U.S. unemployment benefits: search responses in alternative labor market states," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-25, December.
    3. Andrew Figura & David Ratner, 2017. "How Large were the Effects of Emergency and Extended Benefits on Unemployment during the Great Recession and its Aftermath?," Finance and Economics Discussion Series 2017-068, Board of Governors of the Federal Reserve System (U.S.).
    4. Thomas C. Buchmueller & Helen Levy & Robert G. Valletta, 2021. "Medicaid Expansion and the Unemployed," Journal of Labor Economics, University of Chicago Press, vol. 39(S2), pages 575-617.
    5. Jeremy Schwartz, 2019. "The Job Search Intensity Supply Curve: How Labor Market Conditions Affect Job Search Effort," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 45(2), pages 269-300, April.
    6. Elif S. Filiz, 2017. "The Effect of Unemployment Insurance Generosity on Unemployment Duration and Labor Market Transitions," LABOUR, CEIS, vol. 31(4), pages 369-393, December.

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