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Title:Estimating the Effect of Unemployment Insurance Compensation on the Labor Market Histories of Displaced Workers PDF Logo
Authors:Jurajda, Štepán
Issue Date:2001
Series/Report no.:IZA Discussion paper series 294
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.
Subjects:Employment durations
unemployment insurance
unmeasured heterogeneity
defective risks
sample selection
JEL:J65
C41
J63
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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