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A Quasi-Experimental Approach to the Effects of Unemployment Insurance

  • Bruce D. Meyer

This paper uses the natural experiment provided by periodic increases in state benefit levels to estimate the effects of higher unemployment insurance benefits, individuals who filed just before and just after sixteen benefit increases are compared using data from five states during 1979-1984. The increases, which average about 9 percent, are found to increase the period of unemployment insurance receipt by about one week. This effect is precisely estimated and found using several approaches. the incidence of layoffs resulting in unemployment insurance claims is unaffected by the increases. The evidence does not suggest that higher benefits lead to better jobs. In fact, the post-unemployment earnings of individuals receiving higher benefits are estimated to fall slightly, but the estimates are imprecise.

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File URL: http://www.nber.org/papers/w3159.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3159.

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Date of creation: Nov 1989
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Publication status: published as Meyer, Bruce D. "Unemployment Insurance And Unemployment Spells," Econometrica, 1990, v58(4), 757-782.
Handle: RePEc:nbr:nberwo:3159
Note: LS
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  1. Gary Solon, 1981. "Unemployment Insurance, Filing Delay, and Unemployment Duration," Working Papers 524, Princeton University, Department of Economics, Industrial Relations Section..
  2. Finis Welch, 1977. "What have we learned from empirical studies of unemployment insurance?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 30(4), pages 451-461, July.
  3. Gary Solon, 1982. "Work Incentive Effects of Taxing Employment Benefits," Working Papers 529, Princeton University, Department of Economics, Industrial Relations Section..
  4. Alan L. Gustman, 1980. "Analyzing the Relation of Unemployment Insurance to Unemployment," NBER Working Papers 0512, National Bureau of Economic Research, Inc.
  5. Topel, Robert H, 1983. "On Layoffs and Unemployment Insurance," American Economic Review, American Economic Association, vol. 73(4), pages 541-59, September.
  6. Frank Brechling, 1981. "Layoffs and Unemployment Insurance," NBER Chapters, in: Studies in Labor Markets, pages 187-208 National Bureau of Economic Research, Inc.
  7. Mortensen, Dale T, 1970. "Job Search, the Duration of Unemployment, and the Phillips Curve," American Economic Review, American Economic Association, vol. 60(5), pages 847-62, December.
  8. Stephen A. Woodbury & Robert G. Spiegelman, . "Bonuses to Workers and Employers to Reduce unemployment: Randomized Trials in Illinois," Upjohn Working Papers and Journal Articles sawrgs1987, W.E. Upjohn Institute for Employment Research.
  9. Katz, Lawrence F & Meyer, Bruce D, 1990. "Unemployment Insurance, Recall Expectations, and Unemployment Outcomes," The Quarterly Journal of Economics, MIT Press, vol. 105(4), pages 973-1002, November.
  10. Topel, Robert H, 1984. "Experience Rating of Unemployment Insurance and the Incidence of Unemployment," Journal of Law and Economics, University of Chicago Press, vol. 27(1), pages 61-90, April.
  11. Ronald G. Ehrenberg, 1985. "Workers' Compensation, Wages, and the Risk of Injury," NBER Working Papers 1538, National Bureau of Economic Research, Inc.
  12. Martin S. Feldstein, 1975. "The Importance of Temporary Layoffs: An Empirical Analysis," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 6(3), pages 725-745.
  13. Feldstein, Martin S, 1978. "The Effect of Unemployment Insurance on Temporary Layoff Unemployment," American Economic Review, American Economic Association, vol. 68(5), pages 834-46, December.
  14. Danziger, Sheldon & Haveman, Robert & Plotnick, Robert, 1981. "How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 19(3), pages 975-1028, September.
  15. Frank Brechling, 1977. "Unemployment insurance taxes and labor turnover: Summary of theoretical findings," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 30(4), pages 483-492, July.
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