The Long-Term Effects of UI Extensions on Employment
Johannes F. Schmieder, Till von Wachter, Stefan Bender
American Economic Review · 2012 · Volume 102 · Issue 3
Abstract
The majority of papers analyzing the employment effects of unemployment insurance (UI) benefit durations focus on the duration of the first unemployment spell. In this paper, we make two contributions. First, we use a regression discontinuity design to analyze the long-term effects of extensions in UI durations. These estimates differ from standard estimates in that they incorporate differences in UI benefit receipt and employment due to recurrent unemployment spells. Second, we derive a welfare formula of UI extensions that incorporates recurrent nonemployment spells.
Keywords
Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital, Unemployment Insurance, Severance Pay, Plant Closings
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