NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Unemployment Insurance and Disability Insurance in the Great Recession

Andreas I. Mueller, Jesse Rothstein, Till M. von Wachter

NBER Working Paper No. 19672
Issued in November 2013
NBER Program(s):   AG

Disability insurance (DI) applications and awards are countercyclical. One potential explanation is that unemployed individuals who exhaust their Unemployment Insurance (UI) benefits use DI as a form of extended benefits. We exploit the haphazard pattern of UI benefit extensions in the Great Recession to identify the effect of UI exhaustion on DI application, using both aggregate data at the state-month and state-week levels and microdata on unemployed individuals in the Current Population Survey. We find no indication that expiration of UI benefits causes DI applications. Our estimates are sufficiently precise to rule out effects of meaningful magnitude.

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Document Object Identifier (DOI): 10.3386/w19672

Forthcoming: Unemployment Insurance and Disability Insurance in the Great Recession, Jesse Rothstein. in The Labor Market in the Aftermath of the Great Recession, Mas and Card. 2014

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