Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324833 
Year of Publication: 
2025
Series/Report no.: 
Working Paper No. 2025-6
Publisher: 
Federal Reserve Bank of Atlanta, Atlanta, GA
Abstract: 
In the United States, workers whose past earnings were below a threshold are generally ineligible for unemployment insurance (UI), creating a discontinuous jump in the value of being unemployed. Using a regression discontinuity design with administrative panel data, we estimate a sizable local effect from UI eligibility on earnings in the next employer, around 10 percent per quarter. This evidence, however, understates UI's causal effect because of endogenous non-compliance. It also does not distinguish between underlying reasons for higher re-employment earnings, a higher share of production, or more productive matches. These are addressed through a quantitative model. The underlying causal effect is 50 percent higher than the empirical estimates, and nearly all of the effect comes from workers getting a larger share.
Subjects: 
unemployment insurance
directed search
earnings
JEL: 
E24
E30
J62
J63
J64
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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