TY - JOUR AU - Anderson,Patricia M. AU - Meyer,Bruce D. TI - "Unemployment Insurance Benefits and Takeup Rates" JF - National Bureau of Economic Research Working Paper Series VL - No. 4787 PY - 1994 Y2 - June 1994 UR - http://www.nber.org/papers/w4787 L1 - http://www.nber.org/papers/w4787.pdf N1 - Author contact info: Patricia M. Anderson Department of Economics Dartmouth College 6106 Rockefeller Hanover, NH 03755-3514 Tel: 603/646-2532 Fax: 603/646-2122 E-Mail: patricia.m.anderson@dartmouth.edu Bruce D. Meyer Harris School of Public Policy University of Chicago 1155 E. 60th Street Chicago, IL 60637 Tel: 773/702-2712 Fax: 773/702-0926 E-Mail: bdmeyer@uchicago.edu M2 - featured in NBER digest on 1994-09-01 AB - 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. ER -