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Revisiting the Effects of Unemployment Insurance Extensions on Unemployment: A Measurement-Error-Corrected Regression Discontinuity Approach

Author

Listed:
  • Dieterle, Steven
  • Bartalotti, Otávio
  • Brummet, Quentin

Abstract

This study documents two potential biases in recent analyses of UI benefit extensions using boundary-based identification: bias from using county-level aggregates and bias from across-border policy spillovers. To examine the first bias, the analysis uses a regression discontinuity approach that accounts for measurement error in county-level aggregates. These results suggest much smaller effects than previous studies, casting doubt on the applicability of border-based designs. The analysis then shows substantial spillover effects of UI benefit duration on across-border work patterns, consistent with increased tightness in high-benefit states and providing evidence against a dominant vacancy reduction response to UI extensions.

Suggested Citation

  • Dieterle, Steven & Bartalotti, Otávio & Brummet, Quentin, 2020. "Revisiting the Effects of Unemployment Insurance Extensions on Unemployment: A Measurement-Error-Corrected Regression Discontinuity Approach," ISU General Staff Papers 202005010700001703, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:202005010700001703
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    Cited by:

    1. Andreas Hornstein & Marios Karabarbounis & Andre Kurmann & Etienne Lale & Lien Ta, 2023. "Disincentive Effects of Unemployment Insurance Benefits," Working Paper 23-11, Federal Reserve Bank of Richmond.
    2. von Buxhoeveden, Mathias, 2019. "Unemployment insurance and wage formation," Working Paper Series 2019:13, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    3. Jessen, Jonas & Jessen, Robin & Galecka-Burdziak, Ewa & Góra, Marek & Kluve, Jochen, 2023. "The Micro and Macro Effects of Changes in the Potential Benefit Duration," IZA Discussion Papers 15978, Institute of Labor Economics (IZA).
    4. Lechthaler, Wolfgang & Ring, Patrick, 2021. "Labor force participation, job search effort and unemployment insurance in the laboratory," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 748-778.
    5. Winters, John, 2022. "Minimum Wages and Restaurant Employment for Teens and Adults in Metropolitan and Non-Metropolitan Areas," ISU General Staff Papers 202208161905110000, Iowa State University, Department of Economics.
    6. Perez Perez, Jorge, 2020. "City Minimum Wages and Spatial Equilibrium Effects," SocArXiv fpx9e, Center for Open Science.
    7. Julia Fonseca, 2023. "Less Mainstream Credit, More Payday Borrowing? Evidence from Debt Collection Restrictions," Journal of Finance, American Finance Association, vol. 78(1), pages 63-103, February.
    8. Aiwei Huang, 2021. "To What Extent do Labor Market Outcomes respond to UI Extensions?," Papers 2104.12387, arXiv.org.
    9. Camille Landais & Pascal Michaillat & Emmanuel Saez, 2018. "A Macroeconomic Approach to Optimal Unemployment Insurance: Applications," American Economic Journal: Economic Policy, American Economic Association, vol. 10(2), pages 182-216, May.
    10. Jaimovich, Nir & Ferraro, Domenico & Molinari, Francesca & Young, Cristobal, 2020. "The Safety Net as a Springboard? A General Equilibrium based Policy Evaluation," CEPR Discussion Papers 14786, C.E.P.R. Discussion Papers.
    11. Hansen, Niels-Jakob H. & Mano, Rui C., 2023. "Mask mandates save lives," Journal of Health Economics, Elsevier, vol. 88(C).
    12. 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.).
    13. Sehnbruch, Kirsten & Carranza, Rafael & Contreras, Dante, 2020. "Unemployment insurance in Chile: lessons from a high inequality developing country," LSE Research Online Documents on Economics 107824, London School of Economics and Political Science, LSE Library.
    14. repec:osf:socarx:fpx9e_v1 is not listed on IDEAS
    15. Serdar Birinci & Kurt See, 2024. "The Implications of Labor Market Heterogeneity on Unemployment Insurance Design," Working Papers 2024-026, Federal Reserve Bank of St. Louis, revised 03 Nov 2025.
    16. Benjamin S. Kay & Albina Khatiwoda, 2025. "Challenging Demographic Representativeness at State Borders: Implications for Policy Research," Finance and Economics Discussion Series 2025-018, Board of Governors of the Federal Reserve System (U.S.).
    17. Acosta, Miguel & Mueller, Andreas I. & Nakamura, Emi & Steinsson, Jon, 2023. "Macroeconomic Effects of UI Extensions at Short and Long Durations," CEPR Discussion Papers 18534, C.E.P.R. Discussion Papers.
    18. Jardim, Ekaterina & Long, Mark C. & Plotnick, Robert & Vigdor, Jacob & Wiles, Emma, 2024. "Local minimum wage laws, boundary discontinuity methods, and policy spillovers," Journal of Public Economics, Elsevier, vol. 234(C).
    19. Gabriel Chodorow-Reich & Loukas Karabarbounis, 2016. "The Limited Macroeconomic Effects of Unemployment Benefit Extensions," NBER Working Papers 22163, National Bureau of Economic Research, Inc.
    20. Rujiwattanapong, W. Similan, 2025. "Unemployment dynamics and endogenous unemployment insurance extensions," European Economic Review, Elsevier, vol. 178(C).
    21. Dharmasankar, Sharada & Yoo, Hoyoung, 2023. "Assessing the main and spillover effects of Seattle's minimum wage on establishment decisions," Regional Science and Urban Economics, Elsevier, vol. 99(C).
    22. Matthew Kubic, 2025. "The benefits of article 11 pro forma disclosure," Review of Accounting Studies, Springer, vol. 30(3), pages 2768-2821, September.
    23. Yingying Dong & Michal Koles'ar, 2021. "When Can We Ignore Measurement Error in the Running Variable?," Papers 2111.07388, arXiv.org, revised Feb 2023.
    24. Patrick J. Conway, 2022. "Unemployment insurance programs and the choice to leave the labor force," Southern Economic Journal, John Wiley & Sons, vol. 88(4), pages 1373-1400, April.
    25. Yingying Dong & Michal Kolesár, 2023. "When can we ignore measurement error in the running variable?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 38(5), pages 735-750, August.

    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
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • 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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