Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110757
Authors: 
Nekoei, Arash
Weber, Andrea
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9034
Abstract: 
Contrary to standard search model predictions, prior studies failed to estimate a positive effect of unemployment insurance (UI) on reemployment wages. This paper estimates a positive UI wage effect exploiting an age-based regression discontinuity in Austrian administrative data. A search model incorporating duration dependence determines the UI wage effect as the balance between two offsetting forces: UI causes agents to seek higher-wage jobs, but also reduces wages by lengthening unemployment. This implies a negative relationship between the UI unemployment duration and wage effects, which holds empirically both in our sample and across studies, reconciling disparate wage-effect estimates. Empirically, UI raises wages by improving reemployment firms' quality and attenuating wage drops.
Subjects: 
unemployment insurance
job-search
wages
JEL: 
H5
J3
J6
Document Type: 
Working Paper

Files in This Item:
File
Size
445.9 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.