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Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?

Author

Listed:
  • Rebecca Blank

    (Princeton University)

  • David Card

    (Princeton University)

Abstract

This paper presents new evidence on the reasons for the recent decline in the fraction of unemployed workers who receive unemployment insurance benefits. Using samples of unemployed workers from the March Current Population Survey, we estimate the fraction of unemployed workers who are potentially eligible for benefits in each year and compare this to the fraction who actually receive unemployment compensation. Perhaps surprisingly, we find that the decline in the fraction of insured unemployment is due to a decline in the takeup rate for benefits. Our estimates indicate that takeup rates declined abruptly between l98O and 1982, leading to a 6 percentage point decline in the fraction of the unemployed who receive benefits. We go on to analyse the determinants of the takeup rate for unemployment benefits, using both aggregated state-level data and micro-data from the Panel Study of Income Dynamics. Changes in the regional distribution of unemployment account for roughly one-half of the decline in average takeup rates. The remainder of the change is largely unexplained.

Suggested Citation

  • Rebecca Blank & David Card, 1988. "Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?," Working Papers 623, Princeton University, Department of Economics, Industrial Relations Section..
  • Handle: RePEc:pri:indrel:243
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    References listed on IDEAS

    as
    1. Gary Burtless, 1983. "Why Is Insured Unemployment So Low?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 14(1), pages 225-254.
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    More about this item

    Keywords

    unemployment insurance; insured unemployment; extended benefits; takeup rate;

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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