unemployment insurance

Year of Publication
1991
Abstract

In this paper, I consider the effect of changing the level of unemployment
insurance (UI) benefits on workers who do not receive UI. I hypothesize that
a spillover effect between insured and uninsured workers exists so that an
increase in the UI benefits, which leads to longer durations of unemployment
for insured workers, will lead to a reduction in the duration of unemployment
for the uninsured. This prediction is tested using data from several March
Current Population Surveys and the National Longitudinal Survey of Youth. In
both samples I find that an increase in UI benefits leads to a reduction in
the duration of unemployment for uninsured workers. Furthermore, using
several years of state level data, I show that the estimated effect on
unemployment for the entire labor force is roughly zero when I allow for the
spillover effect.

Number
283
Date Published
05/1991
Publication Language
eng
Citation Key
Industrial and Labor Relations Review, vol. 47, no. 1, October 1993
Levine, P. (1991). Spillover Effects Between the Insured and Uninsured Unemployed. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01wh246s14w (Original work published 05/1991AD)
Working Papers

Year of Publication
1988
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.

Number
243
Date Published
11/1988
Publication Language
eng
Citation Key
Quarterly Journal of Economics, 10
Blank, R., Newey, W., & Card, D. (1988). Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01tt44pm86h (Original work published 11/1988AD)
Working Papers

Year of Publication
2008
Abstract

This paper provides new evidence on job search intensity of the unemployed in the U.S., modeling job search intensity as time allocated to job search activities. The main findings are: 1) the average unemployed worker in the U.S. devotes about 41 minutes to job search on weekdays, which is substantially more than his or her European counterpart; 2) workers who expect to be recalled by their previous employer search substantially less than the average unemployed worker; 3) across the 50 states and D.C., job search is inversely related to the generosity of unemployment benefits, with an elasticity between -1.6 and -2.2; 4) the predicted wage is a strong predictor of time devoted to job search, with an elasticity in excess of 2.5; 5) job search intensity for those eligible for Unemployment Insurance (UI) increases prior to benefit exhaustion; 6) time devoted to job search is fairly constant regardless of unemployment duration for those who are ineligible for UI. A nonparametric Monte Carlo technique suggests that the relationship between job search effort and the duration of unemployment for a cross-section of job seekers is only slightly biased by length-based sampling.

Number
532
Date Published
08/2008
Publication Language
eng
Citation Key
8384
Krueger, A., & Mueller, A. (2008). Job Search and Unemployment Insurance: New Evidence from Time Use Data. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01th83kz34p (Original work published 08/2008AD)
Working Papers

Year of Publication
2013
Abstract

In response to the Great Recession and sustained labor market downturn, the availability of unemployment insurance (UI) benefits was extended to new historical highs in the United States, up to 99 weeks as of late 2009 into 2012. We exploit variation in the timing and size of UI benefit extensions across states to estimate the overall impact of these extensions onunemployment duration, comparing the experience with the prior extension of benefits (up to 72 weeks) during the much milder downturn in the early 2000s. Using monthly matched individual data from the U.S. Current Population Survey(CPS) for the periods 2000-2005 and 2007-2012, we estimate the effects of UI extensions on unemployment transitions and duration. We rely on individual variation in benefit availability based on the duration of unemployment spells and the length of UI benefits available in the state and month,conditional on state economic conditions and individual characteristics. We find a small
but statistically significant reduction in the unemployment exit rate and a small increase in the expected duration of unemployment arising from both sets of UI extensions. The effect on exits and duration is primarily due to a reduction in exits from the labor force rather than a decrease in exits to employment (the job ending rate). The magnitude of the overall effect on exits and duration is similar across the two episodes of benefit extensions.
Although the overall effect of UI extensions on exits from unemployment is small, it implies a substantial effect of extended benefits on the steady-state share of unemployment in the cross-section that is long-term.

Number
573
Date Published
04/2013
Publication Language
eng
Citation Key
8839
Farber, H., & Valletta, R. (2013). Do Extended Unemployment Benefits Lengthen Unemployment Spells? Evidence from Recent Cycles in the U.S. Labor Market. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01th83kz40p (Original work published 04/2013AD)
Working Papers

Year of Publication
2015
Abstract

Recent efforts to expand unemployment insurance (UI) eligibility are expected to increase low-earning workers’ access to UI. Although the expansion’s aim is to smooth the
income and consumption of previously ineligible workers, it is possible that UI benefits simply displace other sources of income. Standard economic models predict that UI delays reemployment, thereby reducing wage income. Additionally, low-earning workers are often eligible for benefits from means-tested programs, which may decrease with UI benefits. In this paper, we estimate the impact of UI eligibility on employment, means-tested program participation, and income after job loss using a unique individual-level administrative data set from the state of Michigan. To identify a causal effect, we implement a fuzzy regression discontinuity design around the minimum earnings threshold for UI eligibility. Our main finding is that while UI eligibility increases jobless durations by up to 25 percent and temporarily lowers receipt of cash assistance (TANF) by 63 percent, the net impact on total income is still positive and large: In the quarter immediately following job loss, UI-eligible workers have 46-61 percent higher incomes than ineligibles.

Number
591
Date Published
09/2015
Publication Language
eng
Citation Key
9246
Leung, P., & O’Leary, C. (2015). Should UI Eligibility Be Expanded to Low-Earning Workers? Evidence on Employment, Transfer Receipt, and Income from Administrative Data. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01kw52jb45x (Original work published 09/2015AD)
Working Papers

Year of Publication
1998
Abstract

In this paper we report the results of randomized trials designed to measure whether stricter
enforcement and verification of work search behavior alone decreases unemployment insurance (Ul)
claims and benefits. These experiments were designed to explicitly test claims based on
nonexperimental data, that a prime cause of overpayment is the failure of claimants to actively seek
work. Our results provide no support for the view that the failure to actively search for work has been a
cause of overpayment in the UI system.

Number
412
Date Published
12/1998
Publication Language
eng
Citation Key
7926
Ashenfelter, O., Deschenes, O., & Ashmore, D. (1998). Do Unemployment Insurance Recipients Actively Seek Work? Randomized Trials in Four U.S. States. Retrieved from http://arks.princeton.edu/ark:/88435/dsp010k225b05v (Original work published 12/1998AD)
Working Papers

Author
Year of Publication
1992
Abstract

Throughout the late 1980s unemployment rates remained 2-3 percentage
points higher in Canada than the U.S. We use individual microdata from the
U.S. Current Population Survey and the Canadian Survey of Consumer Finances
to study the emerging unemployment gap between the two countries. For
women, we find that the relative rise in Canadian unemployment occurred
with relative increases in per capita weeks of work. The unemployment gap
for Canadian women was driven by a rise in the probability that nonworkers
are classified as "unemployed" as opposed to "out of the labor force". For
men, the increase in unemployment was accompanied by a relative decrease in
Canadian employment rates, and an increase in the probability that men with
no weeks of work are classified as "in the labor force". A comparison of
annual work patterns and income recipiency in the two countries suggests
that Canadians of both sexes have increasingly adjusted their labor supply
to the parameters of the Canadian Unemployment Insurance system.

Number
297
Date Published
01/1992
Publication Language
eng
Citation Key
In David Card and Richard B. Freeman, editors, Small Differences the Matter: Labor Markets and Income Maintenance in Canada and the United States. Chicago: University of Chicago Press, 1993
Card, D. (1992). A Comparative Analysis of Unemployment in Canada and the United States. Retrieved from http://arks.princeton.edu/ark:/88435/dsp013b5918572 (Original work published 01/1992AD)
Working Papers

Year of Publication
1986
Abstract

A model of unemployment duration is estimated with weekly micro
data on a sample of Canadian men during the 1975 through 1980 period.
Entitlement provisions in the unemployment insurance program and demand
conditions are found to have a significant impact on the probability of
leaving unemployment. The probability of a worker leaving unemployment
declines with duration of unemployment, holding unemployment insurance
entitlement constant. When entitlement is allowed to vary, the probability of leaving first falls and then generally rises with unemployment
duration as the declining entitlement induces a greater willingness to
accept offers or search more intensively. These results are robust to
alternative specifications of duration dependence and to allowing for
person—specific unobserved heterogeneity.

Number
212
Date Published
08/1986
Publication Language
eng
Citation Key
Journal of Labor Economics, Vol. 5, No. 3, July, 1987
Ham, J., & Rea, S. (1986). Unemployment Insurance and Male Unemployment Duration in Canada. Retrieved from http://arks.princeton.edu/ark:/88435/dsp011c18df77g (Original work published 08/1986AD)
Working Papers

Year of Publication
1986
Abstract

Throughout the post—war period, U.S. and Canadian unemployment rates
moved in tandem, but this historical link apparently ended in 1982.
During the past three years, Canadian unemployment rates have been some
three percentage points higher than their U.S. analogues, and this gap
shows no sign of diminishing. This paper is an empirical evaluation of
a variety of explanations for this new unemployment gap.
We first show that the demographic and industrial composition of
the two countries is remarkably similar, so that no simple mechanical
hypothesis explain the basic puzzle. It is also evident that the
increase in Canadian unemployment relative to U.S. unemployment cannot
be fully attributed to output movements. We find that the gap between
actual and predicted Canadian output, based on U.S. output, has fallen
dramatically since 1982 while the unemployment gap has widened. We also
find that unemployment in Canada was 2 to 3 percentage points higher in
1983 and 1984 than predicted by Canadian output.
We have investigated a variety of hypotheses to explain the slow
growth of employment in Canada after 1982. These hypotheses attribute
the slow growth of employment to rigidities in the labor market that
raise employers’ costs and restrict the flow of workers between
sectors. The evidence does not support the notion that the growth in
relative unemployment in Canada is due to differences in the regulation
of the labor market in the two countries. Minimum wage laws and
unemployment benefits are fairly similar in Canada and the U.S., and
neither has changed relative to the other in the last decade.
Unionization rates have increased in Canada relative to U.S. since
1970. Most of this divergence occurred before 1980, however, and does
not seem to have created an unemployment gap prior to 1980. Finally,
the hypothesis that differential real wage rates are a major determinant
of relative employment in the U.S. and Canada is soundly rejected by the
data. Real wage rates have been essentially uncorrelated with employ-
ment movements within each country and between the two countries.

Number
204
Date Published
02/1986
Publication Language
eng
Citation Key
Economica, 53 Special Issue July 1986 S171 - S195
Ashenfelter, O., & Card, D. (1986). Why Have Unemployment Rates in Canada and the U.S. Diverged?. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01bn999673s (Original work published 02/1986AD)
Working Papers

Year of Publication
1996
Abstract

During the 1980s a substantial gap emerged between unemployment rates in Canada and the
United States. In this paper, we use microdata from labor force surveys at the beginning and
end of the decade to examine the sources of the emergent gap. As in earlier work, we find that
most of the relative rise in unemployment in Canada is attributable to an increase in the relative
"labor force attachment" of Canadians, rather than to any shortfall in relative employment.
Indeed, relative employment rates increased in Canada over the 1980s for younger workers and
for adult women. The relative rise in labor force attachment of Canadians is manifested by a
sharp increase in the propensity of non-workers to report themselves as unemployed (i.e. looking
for work) rather than out-of-the-labor force. This change is especially pronounced for individuals
who work just enough to qualify for unemployment insurance (UI) in Canada. Moreover, two-
thirds of the relative increase in weeks of unemployment among non-workers is associated with
the divergent trends in UI recipiency in the two countries. Both findings point to the availability
of UI benefits as an important determinant of the labor force attachment of nonworkers.

Number
352
Date Published
12/1996
Publication Language
eng
Citation Key
In B. Curtis Eaton and Richard Harris (eds.), Trade, Technology and Economics: Essays in Honour of Richard G. Lipsey, Brookfield, MA:Edward Elgar, 1997
Riddell, C., & Card, D. (1996). Unemployment in Canada and the United States: A Further Analysis. Retrieved from http://arks.princeton.edu/ark:/88435/dsp0108612n53n (Original work published 12/1996AD)
Working Papers