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Does Unemployment Insurance Affect Productivity?


  • Michal Soltes

    (CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences, Politickych veznu 7, 111 21 Prague, Czech Republic)


This study provides evidence that more generous unemployment insurance system is associated with faster growth of productivity. The results are consistent with the theory that higher social insurance allows workers to search for more suited jobs and as a result, the worker-job match is more productive (e.g. Acemoglu and Shimer (1999)). This study also discusses reasons why the observed relationship is unlikely to be explained by the fact that richer countries provide more generous unemployment insurance. Our results extend the previous literature on generosity of unemployment insurance and quality of post-unemployment worker-job match by studying the effect on aggregate productivity.

Suggested Citation

  • Michal Soltes, 2017. "Does Unemployment Insurance Affect Productivity?," Working Papers IES 2017/23, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Sep 2017.
  • Handle: RePEc:fau:wpaper:wp2017_23

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    Cited by:

    1. Ulku,Hulya & Georgieva,Dorina Peteva, 2022. "Unemployment Benefits, Active Labor Market Policies, and Labor Market Outcomes : Evidencefrom New Global Data," Policy Research Working Paper Series 10027, The World Bank.

    More about this item


    Unemployment Insurance; TFP Growth; Generosity of Unemployment Insurance; Productivity;
    All these keywords.

    JEL classification:

    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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