"Unemployment Insurance Benefits and Takeup Rates"

Patricia M. Anderson, Bruce D. Meyer

NBER Working Paper No. 4787
Issued in June 1994
NBER Program(s):   LS

Despite clear theoretical predictions of UI effects on takeup there is little work on the link between program generosity and the propensity to file for benefits. Administrative data allow us to assign the potential level and duration of benefits accurately for a sample of workers separating from their employers, whether or not UI was ever actually received. We then use these values along with marginal tax rates as our main explanatory variables in logit equation estimates of the probability that a separating employee receives UI. We find a strong positive effect of the benefit level on takeup, but little effect of the potential duration of benefits. The estimates imply elasticities of the takeup rate with respect to benefits of about 0.46 to 0.78. Our estimates also show that potential claimants respond to the tax treatment of benefits. Simulations of the effects of taxing UI benefits indicate that recent tax changes can account for most of the decline in UI receipt in the 1980's. In addition, we find theoretical and empirical support for the proposition that those with short unemployment spells are less likely to file. We show that if the decision to file for UI is affected by benefit levels and the expected duration of unemployment, it will bias estimates of the effects of UI on unemployment duration.

download in pdf format
   (2613 K)

download in djvu format
   (296 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w4787

Published: Quarterly Journal of Economics, as "Unemployment Insurance Take-up rates and the After-Tax Value of Benefits". vol.112, August 1997.

Users who downloaded this paper also downloaded these:
Anderson and Meyer w4960 The Effects of Unemployment Insurance Taxes and Benefits on Layoffs Using Firm and Individual Data
Currie w10488 The Take Up of Social Benefits
Blank and Card w2871 Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?
Meyer w3159 A Quasi-Experimental Approach to the Effects of Unemployment Insurance
Meyer w2546 Unemployment Insurance And Unemployment Spells
NBER Videos

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

Contact Us