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Unemployment Insurance and Underemployment

Author

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  • 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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    Cited by:

    1. Susanne Ek Spector, 2022. "Should unemployment insurance cover partial unemployment?," IZA World of Labor, Institute of Labor Economics (IZA), pages 199-199, June.
    2. Auray, Stéphane & Lepage-Saucier, Nicolas, 2021. "Stepping-stone effect of atypical jobs: Could the least employable reap the most benefits?," Labour Economics, Elsevier, vol. 68(C).
    3. Hélène Benghalem & Pierre Cahuc & Pierre Villedieu, 2022. "The Lock-in Effects of Part-Time Unemployment Benefits," Working Papers hal-03881625, HAL.
    4. Boeri, Tito & Cahuc, Pierre, 2022. "Labor Market Insurance Policies in the XXI Century," IZA Discussion Papers 15601, Institute of Labor Economics (IZA).
    5. Tito Boeri & Pierre Cahuc, 2022. "Labor Market Insurance Policies in the XXI Century," Post-Print hal-03878719, HAL.
    6. Tito Boeri & Pierre Cahuc, 2022. "Labor Market Insurance Policies in the XXI Century," SciencePo Working papers Main hal-03878719, HAL.
    7. Boeri, Tito & Cahuc, Pierre, 2022. "Labor market insurance policies in the XXI century," LSE Research Online Documents on Economics 118000, London School of Economics and Political Science, LSE Library.
    8. Hélène Benghalem & Pierre Cahuc & Pierre Villedieu, 2022. "The Lock-in Effects of Part-Time Unemployment Benefits," SciencePo Working papers Main hal-03881625, HAL.

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    More about this item

    Keywords

    duration analysis; unemployment insurance; part-time work;
    All these keywords.

    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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