NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut

Andrew C. Johnston, Alexandre Mas

NBER Working Paper No. 22411
Issued in July 2016
NBER Program(s):Economic Fluctuations and Growth, Labor Studies, Public Economics

We examine how a 16-week cut in potential unemployment insurance (UI) duration in Missouri affected search behavior of UI recipients and the aggregate labor market. Using a regression discontinuity design (RDD), we estimate a marginal effect of maximum duration on UI and nonemployment spells of approximately 0.5 and 0.3 respectively. We use RDD estimates to simulate the unemployment rate assuming no market-level externalities. The simulated response closely approximates the estimated change in the unemployment rate following the benefit cut, suggesting that even in a period of high unemployment the labor market absorbed this influx of workers without crowding-out other jobseekers.

download in pdf format
   (1246 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w22411

Users who downloaded this paper also downloaded* these:
Autor, Duggan, Greenberg, and Lyle w21144 The Impact of Disability Benefits on Labor Supply: Evidence from the VA's Disability Compensation Program
Maestas, Mullen, and Powell w22452 The Effect of Population Aging on Economic Growth, the Labor Force and Productivity
Wehby, Dave, and Kaestner w22373 Effects of the Minimum Wage on Infant Health
Hoynes and Patel w21340 Effective Policy for Reducing Inequality? The Earned Income Tax Credit and the Distribution of Income
Marinescu w22447 The General Equilibrium Impacts of Unemployment Insurance: Evidence from a Large Online Job Board
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us