Estimating the effect of unemployment insurance compensation on the labor market histories of displaced workers

Abstract

'In this paper, U.S. data on labor market histories of displaced workers are used to quantify the effect of Unemployment Insurance Compensation (UIC) on both unemployment and employment durations. This results in the first available assessment of the effect that UIC has on the fraction of time spent employed. The estimation procedure simultaneously allows for unobserved heterogeneity, defective risks and sample selection into future spells, and uses alternative assumptions about agents' knowledge of the UIC eligibility rules. Being entitled to UIC shortens workers' employment durations. This negative effect on the fraction of time spent employed could be offset by suspending an extended benefits program in order to shorten unemployment durations.' (author's abstract)Der Beitrag untersucht die Auswirkungen der Arbeitslosenunterstuetzung in den Vereinigten Staaten auf die Dauer der Beschaeftigungsverhaeltnisse und der Arbeitslosigkeit. (IAB)German title: Schaetzung der Auswirkungen der Arbeitslosenunterstuetzung auf den Berufsverlauf von EntlassenenSIGLEAvailable from ftp://ftp.iza.org/dps/dp294.pdf / FIZ - Fachinformationszzentrum Karlsruhe / TIB - Technische InformationsbibliothekDEGerman