Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/161062
Authors: 
Boone, Christopher
Dube, Arindrajit
Goodman, Lucas
Kaplan, Ethan
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 10439
Abstract: 
This paper examines the impact of unemployment insurance (UI) on aggregate employment by exploiting cross-state variation in the maximum benefit duration during the Great Recession. Comparing adjacent counties located in neighboring states, we find no statistically significant impact of increasing UI generosity on aggregate employment. Our point estimates are uniformly small in magnitude, and the most precise estimates rule out employment-to-population ratio reductions in excess of 0.32 percentage points from the UI extension. We show that a moderately sized fiscal multiplier can rationalize our findings with the small negative labor supply impact of UI typically found in the literature.
Subjects: 
labor supply
unemployment insurance
fiscal multiplier
JEL: 
J65
E62
E32
Document Type: 
Working Paper

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