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Discontinuous or Kinked Response? Dynamics of Unemployment Insurance and Public Assistance under the COVID-19 Crisis

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  • Ando, Michihito
  • Furuichi, Masato
  • Kanayama, Hayato

Abstract

This study investigates the responsiveness of Unemployment Insurance (UI) and Public Assistance (PA) programs during the COVID-19 employment shock in Japan. Estimating "excess" UI and PA caseloads under the COVID-19 crisis, we reveal heterogeneous responses to the COVID-19 shock: UI caseloads exhibit an instantaneous and discontinuous increase and subsequent decrease, while PA caseloads show a kinked and incremental increase. These contrasting safety net responses highlight a potential delay in safety net support for workers who are not eligible for UI benefits when a large employment shock occurs.

Suggested Citation

  • Ando, Michihito & Furuichi, Masato & Kanayama, Hayato, 2023. "Discontinuous or Kinked Response? Dynamics of Unemployment Insurance and Public Assistance under the COVID-19 Crisis," SocArXiv vs8tr, Center for Open Science.
    • Handle: RePEc:osf:socarx:vs8tr
    DOI: 10.31219/osf.io/vs8tr
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    References listed on IDEAS

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    9. Pauline Leung & Christopher O'Leary, 2020. "Unemployment Insurance and Means-Tested Program Interactions: Evidence from Administrative Data," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 159-192, May.
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