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Unemployment Insurance and Underemployment

Author

Listed:
  • Godoy, Anna

    () (Institute for Social Research, Oslo)

  • Røed, Knut

    () (Ragnar Frisch Centre for Economic Research)

Abstract

Should unemployment insurance (UI) systems provide coverage for underemployed job seekers? Based on a statistical analysis of Norwegian unemployment spells, we conclude that the answer to this question is yes. Allowing insured job seekers to retain partial UI benefits during periods of insufficient part-time work not only reduces UI expenditures during the part-time work period; it also unambiguously reduces the time until a regular self-supporting job is found. Probable explanations are that even small temporary part-time jobs provide access to useful vacancy-information and that such jobs are used by employers as a screening device when hiring from the unemployment pool.

Suggested Citation

  • Godoy, Anna & Røed, Knut, 2014. "Unemployment Insurance and Underemployment," IZA Discussion Papers 7913, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp7913
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    References listed on IDEAS

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    More about this item

    Keywords

    duration analysis; unemployment insurance; part-time work;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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