NATIONAL BUREAU OF ECONOMIC RESEARCH
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Do Unemployment Insurance Benefits Improve Match Quality? Evidence from Recent U.S. Recessions

Ammar Farooq, Adriana D. Kugler, Umberto Muratori

NBER Working Paper No. 27574
Issued in July 2020
NBER Program(s):Labor Studies, Public Economics

We present new evidence on the impact of more generous unemployment insurance (UI) on workers’ ability to find jobs better suited to their skills. Using Longitudinal Employer-Household Dynamics data, we find the UI extensions introduced in the U.S. improved the quality of worker-job matches. Using Current Population Survey data, we also find that longer UI benefit durations decrease the mismatch between workers’ educational attainments and the educational requirements of jobs. We find bigger effects of UI on match quality for those more likely to be liquidity constrained—women, non-whites and less-educated workers—,suggesting UI extensions improve the functioning of the labor market.

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Document Object Identifier (DOI): 10.3386/w27574

 
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