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The Effect of Unemployment Insurance on Unemployment Duration: Evidence from the Displaced Workers Survey

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Abstract

In this paper, we study the usually ignored group of unemployed workers who are eligible for unemployment insurance but never claim or receive any benefits. This group is generally combined with the non-eligible in empirical studies and we show that this misclassification has the potential to introduce upward bias into measures of the disincentive effects of unemployment insurance. We measure the empirical effects of this potential bias by exploiting a data set which allows for the identification of likely eligible non-claimants. Disincentive effects decline significantly when our reconstructed eligibility date are used. Dans cet article, nous étudions le comportement des chômeurs qui sont éligibles aux bénéfices de l'assurance chômage mais ne réclament ou ne reçoivent jamais ces bénéfices. Ce groupe de chômeurs est généralement confondu avec les travailleurs non-éligibles dans l'analysse empirique. Nous montrons que cette erreur de classification peut introduire un biais positif important dans l'estimation des effets désincitants de l'assurance chômage. Nous mesurons l'importance de ce biais en exploitant une banque de données qui nous permet d'identifier les chômeurs susceptibles d'être éligibles mais qui ne reçoivent pas d'allocation de chômage. L'effet désincitant est réduit significativement lorsque nos données d'éligibilité sont utilisées.

Suggested Citation

  • Marc Van Audenrode & Paul Storer, 1992. "The Effect of Unemployment Insurance on Unemployment Duration: Evidence from the Displaced Workers Survey," Cahiers de recherche CREFE / CREFE Working Papers 7, CREFE, Université du Québec à Montréal.
  • Handle: RePEc:cre:crefwp:7
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    More about this item

    Keywords

    Unemployment insurance; eligible unemployed.;

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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