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Unemployment Insurance as a Worker Indiscipline Device? Evidence from Scanner Data

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  • Lester Lusher
  • Geoffrey C. Schnorr
  • Rebecca L.C. Taylor

Abstract

We provide causal evidence of an ex ante moral hazard effect of unemployment insurance (UI) by matching plausibly exogenous changes in UI benefit duration across state-weeks during the Great Recession to high-frequency productivity measures from individual supermarket cashiers. Estimating models with date and cashier-register fixed effects, we identify a modest but statistically significant negative relationship between UI benefits and worker productivity. This effect is strongest for more experienced and less productive cashiers, for whom UI expansions are especially relevant. Additional analyses from the American Time Use Survey reveal a similar increase in shirking during periods with increased UI benefit durations.

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  • Lester Lusher & Geoffrey C. Schnorr & Rebecca L.C. Taylor, 2022. "Unemployment Insurance as a Worker Indiscipline Device? Evidence from Scanner Data," American Economic Journal: Applied Economics, American Economic Association, vol. 14(2), pages 285-319, April.
    • Handle: RePEc:aea:aejapp:v:14:y:2022:i:2:p:285-319
    DOI: 10.1257/app.20190007
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    Cited by:

    1. Audrey Guo & Andrew C. Johnston, 2021. "The Finance of Unemployment Compensation and Its Consequences," Public Finance Review, , vol. 49(3), pages 392-434, May.
    2. Guo, Audrey & Johnston, Andrew C., 2020. "The Finance of Unemployment Compensation and its Consequence for the Labor Market," IZA Discussion Papers 13330, Institute of Labor Economics (IZA).
    3. Jason M. Lindo & Krishna Regmi & Isaac Swensen, 2020. "Stable Income, Stable Family," NBER Working Papers 27753, National Bureau of Economic Research, Inc.
    4. Thomas Le Barbanchon & Johannes Schmieder & Andrea Weber, 2024. "Job Search, Unemployment Insurance, and Active Labor Market Policies," RF Berlin - CReAM Discussion Paper Series 2424, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    5. Pagano, Marco, 2020. "Risk Sharing Within the Firm: A Primer," Foundations and Trends(R) in Finance, now publishers, vol. 12(2), pages 117-198, October.
    6. Dahl, Gordon B. & Knepper, Matthew, 2021. "Why Is Workplace Sexual Harassment Underreported? The Value of outside Options amid the Threat of Retaliation," IZA Discussion Papers 14740, Institute of Labor Economics (IZA).
    7. Jonathan Cohen & Geoffrey C. Schnorr, 2024. "Efficiency Costs of Unemployment Insurance Denial: Evidence from Randomly Assigned Examiners," Upjohn Working Papers 24-404, W.E. Upjohn Institute for Employment Research.

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    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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