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Unemployment Compensation and Older Workers

Author

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  • Christopher J. O'Leary

    () (W.E. Upjohn Institute for Employment Research)

  • Stephen A. Wandner

    (U.S. Department of Labor)

Abstract

Unemployment compensation in the United States is provided through a federal-state system of unemployment insurance (UI). UI provides temporary partial wage replacement to active job seekers who are involuntarily out of work. For older workers, UI is an important source of income security and a potential influence on work incentives. For many, the transition from full-time work in a career job to retirement is voluntary and orderly. For others, job displacement greatly disrupts plans. The transition often involves many intermediate steps. The chain of transitions may include full- or part-time work on another job which most often is not in the same industry and occupation (a bridge job). There may also be movement between bridge jobs, perhaps back from a bridge job to a career job, and finally a gradual movement into full retirement while out of the labor force. Many issues at the forefront of current UI policy debate are also issues of prime importance to those in the second half of their working life. Issues occur in all the standard areas of UI policy: coverage, eligibility, benefit adequacy, duration of benefits, work incentives, benefit financing, and interaction with other programs. This paper provides a brief background sketch of the labor market situation of older workers to examine issues of prime concern to older workers in these areas of UI policy. Our survey of policy issues suggests that changes in UI rules concerning, initial eligibility, continuing eligibility, wage replacement, and partial benefits should all be examined to evaluate effects on the likely employment patterns of older workers. Particular attention should be given to UI features affecting the choice of self-employment, part-time work, seasonal work, and agricultural jobs. The financing consequences of possible UI program changes should also be estimated, as should the macroeconomic impact of broadening recipiency. UI program features which would promote flexible and extended labor force participation by older workers should also enrich the employment choice environment for other workers. Therefore, it would be useful to examine the impact of such program changes on UI as a built-in stabilizer of aggregate expenditures. While younger workers are usually committed to long-term participation in the labor force, older citizens are often more flexible in choosing to use their time. Worsening labor shortage conditions in the United States mean that efforts to retain older workers in the labor force will intensify. The current and potential influence of UI on the income security and labor force participation of older workers should be well understood.

Suggested Citation

  • Christopher J. O'Leary & Stephen A. Wandner, 2000. "Unemployment Compensation and Older Workers," Upjohn Working Papers and Journal Articles 00-61, W.E. Upjohn Institute for Employment Research.
  • Handle: RePEc:upj:weupjo:00-61
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    References listed on IDEAS

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    1. Terry R. Johnson & Daniel H. Klepinger, 1994. "Experimental Evidence on Unemployment Insurance Work-Search Policies," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 665-717.
    2. Christopher J. O'Leary & Stephen A. Wandner, 1997. "Summing Up: Achievements, Problems, and Prospects," Book chapters authored by Upjohn Institute researchers,in: Christopher J. O'Leary & Stephen A. Wandner (ed.), Unemployment Insurance in the United States: Analysis of Policy Issues, chapter 15, pages 669-722 W.E. Upjohn Institute for Employment Research.
    3. Sewin Chan & Ann Huff Stevens, 1999. "Job Loss and Retirement Behavior of Older Men," NBER Working Papers 6920, National Bureau of Economic Research, Inc.
    4. Christopher J. O'Leary, 1998. "The Adequacy of Unemployment Insurance Benefits," Book chapters authored by Upjohn Institute researchers,in: Laurie J. Bassi & Stephen A. Woodbury (ed.), Reform of the Unemployment Insurance System: Research in Employment Policy, volume 1, pages 63-110 W.E. Upjohn Institute for Employment Research.
    5. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    6. Christopher J. O'Leary & Murray Rubin, 1997. "Adequacy of the Weekly Benefit Amount," Book chapters authored by Upjohn Institute researchers,in: Christopher J. O'Leary & Stephen A. Wandner (ed.), Unemployment Insurance in the United States: Analysis of Policy Issues, chapter 5, pages 163-210 W.E. Upjohn Institute for Employment Research.
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    17. repec:mpr:mprres:1134 is not listed on IDEAS
    18. Saul J. Blaustein & Christopher J. O'Leary & Stephen A. Wandner, 1997. "Policy Issues: An Overview," Book chapters authored by Upjohn Institute researchers,in: Christopher J. O'Leary & Stephen A. Wandner (ed.), Unemployment Insurance in the United States: Analysis of Policy Issues, chapter 1, pages 1-49 W.E. Upjohn Institute for Employment Research.
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    Cited by:

    1. Michael Huberman & Chris Minns, 2005. "Hours of Work in Old and New Worlds: The Long View, 1870-2000," The Institute for International Integration Studies Discussion Paper Series iiisdp95, IIIS.
    2. Christopher J. O'Leary & Randall W. Eberts, 2008. "Reemployment and Earnings Recovery among Older Unemployment Insurance Claimants," Book chapters authored by Upjohn Institute researchers, W.E. Upjohn Institute for Employment Research.
    3. Bhattacharya, Joydeep & Reed, Robert, 2003. "Age-Specific Employment Policies," Staff General Research Papers Archive 10256, Iowa State University, Department of Economics.
    4. Bhattacharya, Joydeep & Reed, Robert, 2006. "Social Security and Intergenerational Redistribution," Staff General Research Papers Archive 12661, Iowa State University, Department of Economics.
    5. Mark C. Berger & Dan Black & Jeffrey Smith, 2000. "Evaluating Profiling as a Means of Allocating Government Services," UWO Department of Economics Working Papers 200018, University of Western Ontario, Department of Economics.

    More about this item

    Keywords

    unemployment; insurance; compensation; older; workers; O'Leary; Wandner;

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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