Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/223773 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13331
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We examine how a 16-week cut in potential unemployment insurance (UI) duration in Missouri affected search behavior of UI recipients and the aggregate labor market. Using a regression discontinuity design (RDD), we estimate a marginal effect of maximum duration on UI and nonemployment spells of approximately 0.45 and 0.25 respectively. We use the RDD estimates to simulate the unemployment rate assuming no market-level externalities. The simulated response, which implies almost a one percentage point decline in the unemployment rate, closely approximates the estimated change in the unemployment rate following the benefit cut. This finding suggests that, even in a period of high unemployment, the labor market absorbed this influx of workers without crowding-out other jobseekers.
Subjects: 
employment
labor supply
benefits
unemployment insurance
unemployment
JEL: 
J64
J65
D91
Document Type: 
Working Paper

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