Unemployment Insurance, Unemployment Durations and Re-employment Wages
We develop an empirical model to estimate the impact of UI on unemployment duration and reemployment wages. The model estimates the UI receipt, unemployment duration and re-employment wage equations simultaneously and incorporates unobserved heterogeneity variables in each equation and allows them to be correlated. The NLSY79 data is used to estimate the model. Some results are found support of the positive effect of UI on re-employment wages.
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