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Unemployment Insurance and Household Welfare: Microeconomic Evidence 1980-93

Author

Listed:
  • Daniel S. Hamermesh
  • Daniel T. Slesnick

Abstract

This study examines the relative economic well-being of households that receive unemployment insurance (UI) benefits, as measured by consumption flows that are derived from information on households' spending in the Consumer Expenditure Surveys from 1980- 1993. For each quarter during this period we obtain the per-capita and equivalence-scale adjusted economic welfare of the two types of households. Adjusting for differences in the households' characteristics, we find: 1) The average UI recipient household during this period had a level of economic well-being that was on average between 3 and 8 percent below that of otherwise identical households (depending on the welfare measure used); 2) During a substantial part of this time the economic well-being of households that received UI benefits was at least that of other households; and 3) There is no cyclical variation in the relative well-being of UI recipient households compared to others. The findings imply that during the 1980s and early 1990s states' UI programs did a satisfactory job of maintaining the well-being of UI recipients. Emergency programs enacted during recessions raised potential duration sufficiently to prevent the economic position of the average UI recipient from deteriorating.

Suggested Citation

  • Daniel S. Hamermesh & Daniel T. Slesnick, 1995. "Unemployment Insurance and Household Welfare: Microeconomic Evidence 1980-93," NBER Working Papers 5315, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5315
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    Cited by:

    1. Hartley, Gonzalo Reyes & van Ours, Jan C. & Vodopivec, Milan, 2011. "Incentive effects of unemployment insurance savings accounts: Evidence from Chile," Labour Economics, Elsevier, vol. 18(6), pages 798-809.
    2. Milan Vodopivec, 2013. "Introducing unemployment insurance to developing countries," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    3. Katherine Baicker & Claudia Goldin & Lawrence F. Katz, 1998. "A Distinctive System: Origins and Impact of U.S. Unemployment Compensation," NBER Chapters,in: The Defining Moment: The Great Depression and the American Economy in the Twentieth Century, pages 227-264 National Bureau of Economic Research, Inc.
    4. Walter Nicholson & Karen Needels, 2006. "Unemployment Insurance: Strengthening the Relationship between Theory and Policy," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 47-70, Summer.
    5. Vodopivec, Milan & Raju, Dhushyanth, 2002. "Income support systems for the unemployed : issues and options," Social Protection and Labor Policy and Technical Notes 25529, The World Bank.
    6. Milan Vodopivec, 2006. "Choosing a System of Unemployment Income Support: Guidelines for Developing and Transition Countries," World Bank Research Observer, World Bank Group, vol. 21(1), pages 49-89.

    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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