The effects of unemployment insurance on labor supply and search outcomes : regression discontinuity estimates from Germany

"This paper evaluates the impact of large changes in the duration of unemployment insurance (UI) in different economic environments on labor supply, job matches, and search behavior. We show that differences in eligibility thresholds by exact age give rise to a valid regression discontinuity design, which we implement using administrative data on the universe of new unemployment spells and career histories over twenty years from Germany. We find that increases in UI have small to modest effects on non-employment rates, a result robust over the business cycle and across demographic groups. Thus, large expansions in UI during recessions do not lead to lasting increases in unemployment duration, nor can they explain differences in unemployment durations across countries. We do not find any effect of increased UI duration on average job quality, but show that the mean potentially confounds differential effects on job search across the distribution of UI duration. However, it appears that for a majority of UI beneficiaries increases in UI duration may lead to small declines in wages." (Author's abstract, IAB-Doku) ((en))Arbeitslosenversicherung, Arbeitskräfteangebot, Arbeitsuche, Lohnhöhe, Arbeitslosigkeitsdauer, Konjunkturzyklus, geschlechtsspezifische Faktoren, matching, amtliche Statistik

The Effects of Extended Unemployment Insurance over the Business Cycle: Evidence from Regression Discontinuity Estimates Over Twenty Years

One goal of extending the duration of unemployment insurance (UI) in recessions is to increase UI coverage in the face of longer unemployment spells. Although it is a common concern that such extensions may themselves raise nonemployment durations, it is not known how recessions would affect the magnitude of this moral hazard. To obtain causal estimates of the differential effects of UI in booms and recessions, this paper exploits the fact that, in Germany, potential UI benefit duration is a function of exact age which is itself invariant over the business cycle. We implement a regression discontinuity design separately for twenty years and correlate our estimates with measures of the business cycle. We find that the nonemployment effects of a month of additional UI benefits are, at best, somewhat declining in recessions. Yet, the UI exhaustion rate, and therefore the additional coverage provided by UI extensions, rises substantially during a downturn. The ratio of these two effects represents the nonemployment response of workers weighted by the probability of being affected by UI extensions. Hence, our results imply that the effective moral hazard effect of UI extensions is significantly lower in recessions than in booms. Using a model of job search with liquidity constraints, we also find that, in the absence of market-wide effects, the net social benefits from UI extensions can be expressed either directly in terms of the exhaustion rate and the nonemployment effect of UI durations, or as a declining function of our measure of effective moral hazard.

The Long-Term Effects of Unemployment Insurance Extensions on Employment

The majority of papers analyzing the employment effects of unemployment insurance (UI) benefit durations focuses 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 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. We find that accounting for nonemployment beyond the initial spell leads to a significant reduction in estimates of the nonemployment effect of UI extensions by about 25 percent. We show this effect is only partly explained by a mechanical effect due to finite follow-up durations, and mainly arises from a lower probability of days in nonemployment in months after end of the initial nonemployment spell.

Blockchain-based Financial Infrastructure for Emerging Economies

The transformative capacity of blockchain technology is a frequently debated topic in the information systems (IS) and practitioner literature. Yet, rigorous and design-driven research remains relatively uncommon. We document an ongoing design process towards a blockchain-based IT-artefact comprising financial infrastructure for stakeholders in emerging economies. Working with a young NGO, we utilize the design-science research methodology (DSR) in the design, implementation, and evaluation of the IT-artefact. The artefact enables stakeholders to conduct basic financial services by computing transactions, maintaining a savings account, and receiving targeted stimulus payments. Following six months of iterative design and development, we released a global pilot version of the artefact. Over the first nine months, the pilot generated a dataset of 6.6 million transactions amongst 189,379 verified users. By conducting design-driven research, we contribute novel practical insights to the IS discourse on the transformative capacity of blockchain technology and information communication technologies (ICT) in emerging economies

Multi-block MEV

Multi-block MEV denotes the practice of securing k-consecutive blocks in the attempt at extracting surplus value by manipulating transaction ordering. Following the implementation of proposer/builder separation (PBS) on Ethereum, savvy builders can secure consecutive block space by implementing targeted bidding strategies through relays. We collect data on all bids submitted by builders through relays, finding that 20.60% of blocks issued since the Merge share single builder entities for consecutive sequences. Our results indicate that single builder entities are implementing super linear bidding strategies above market, to secure consecutive block space. By comparing the results to a simulation of naive builder behavior, we show that MMEV extraction may be common amongst leading builder entities

The effects of unemployment insurance on labor supply and search outcomes: Regression discontinuity estimates from Germany

This paper evaluates the impact of large changes in the duration of unemployment insurance (UI) in different economic environments on labour supply, job matches, and search behaviour. We show that differences in eligibility thresholds by exact age give rise to a valid regression discontinuity design, which we implement using administrative data on the universe of new unemployment spells and career histo-ries over twenty years from Germany. We find that increases in UI have small to modest effects on non-employment rates, a result robust over the business cycle and across demographic groups. Thus, large expansions in UI during recessions do not lead to lasting increases in unemployment duration, nor can they explain differ-ences in unemployment durations across countries. We do not find any effect of increased UI duration on average job quality, but show that the mean potentially confounds differential effects on job search across the distribution of UI duration. However, it appears that for a majority of UI beneficiaries' increases in UI duration may lead to small declines in wages.Dieses Papier wertet den Einfluss von weitreichenden Veränderungen in der Bezugsdauer der Arbeitslosenversicherung in verschiedenen ökonomischen Umgebungen auf Arbeitsangebot, Qualität der Arbeitsstelle und Suchverhalten aus. Wir zeigen, dass Altersbegrenzungen in der Anspruchsberechtigung ein gültiges Regression-Discontinuity-Design erlauben, welches wir mit administrativen Daten auf Basis der Grundgesamtheit der Arbeitslosengeldbezieher in Deutschland über 20 Jahre umsetzen. Wir beobachten, dass Anstiege in der Arbeitslosenversicherung (UI) kleine bis mäßige Effekte auf die Nichtbeschäftigungsrate haben, ein Ergebnis, das robust über den Konjunkturzyklus und verschiedene demografische Gruppen ist. Demzufolge führen große Ausweitungen in der Arbeitslosenversicherung während Rezessionen weder zu andauernden Anstiegen der Arbeitslosigkeitsdauer, noch können sie Unterschiede in der Arbeitslosigkeitsdauer verschiedener Länder erklären. Wir können keinen Effekt von höherer UI Bezugsdauer auf die durchschnittliche Arbeitsplatzqualität finden, aber zeigen, dass der Durchschnitt möglicherweise unterschiedliche Effekte auf die Jobsuche über die Verteilung der UI Bezugsdauer miteinander vermengt. Es scheint jedoch, dass für eine Mehrheit der UI Empfänger eine ansteigende UI Bezugsdauer zu kleinen Abstrichen bei den Gehältern führt

The Long-Term Impact of Job Displacement in Germany During the 1982 Recession on Earnings, Income, and Employment

We show that workers displaced from their stable jobs during mass-layoffs in 1982 recession in Germany suffered permanent earnings losses of 10-15% lasting at least 15 years. These estimates are obtained using data and methodology comparable to similar studies for the United States. Exploiting advantages of the German data, we also show that while reduction and recovery in time worked plays a role in explaining earnings losses during the first ten years, the majority of the long-run loss is due to a decline in wages. We also show that even the generous German unemployment insurance system replaced only a small fraction of the total earnings loss. These findings suggest that job displacements can lead to large and lasting reductions in income even in labor markets with tighter social safety nets and lower earnings inequality

Nanoparticle detection in an open-access silicon microcavity

We report on the detection of free nanoparticles in a micromachined, open-access Fabry-P\'erot microcavity. With a mirror separation of $130\,\mu$m, a radius of curvature of $1.3\,$mm, and a beam waist of $12\,\mu$m, the mode volume of our symmetric infrared cavity is smaller than $15\,$pL. The small beam waist, together with a finesse exceeding 34,000, enables the detection of nano-scale dielectric particles in high vacuum. This device allows monitoring of the motion of individual $150\,$nm radius silica nanospheres in real time. We observe strong coupling between the particles and the cavity field, a precondition for optomechanical control. We discuss the prospects for optical cooling and detection of dielectric particles smaller than $10\,$nm in radius and $1\times10^7\,$amu in mass.Comment: 4 pages, 3 figure