Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282636 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16509
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
The generosity of social insurance coverage often increases with the beneficiary's age and their contribution time to social security, but existing policies vary considerably. We study the differentiation of unemployment insurance (UI) generosity by evaluating how the insurance-incentive trade-off varies with age and contribution time. We exploit numerous discontinuities in potential benefit duration in Germany. Contribution time in the last three years carries information on job search efforts, as it is associated with lower moral hazard responses and fiscal externality. We find no significant response heterogeneity in age or longer contribution time horizons. Contrasting these gradients with an approximated insurance value for four UI regimes, we document that steepening the potential benefit duration schedule in contribution time and flattening it in age would have increased welfare.
Subjects: 
policy differentiation
response heterogeneity
unemployment insurance
JEL: 
J08
J64
J65
Document Type: 
Working Paper

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