Market Externalities of Large Unemployment Insurance Extension Programs
By Rafael Lalive, Camille Landais, Josef Zweimüller. Social Science Research Network, 2013
170 citations recorded by the source corpus.
This paper offers quasi experimental evidence of the existence of spillover effects of UI extensions using a unique program that extended unemployment benefits drastically for a subset of workers in selected regions of Austria. We use non-eligible unemployed in treated regions, and a difference-in-difference identification strategy to control for preexisting differences across treated and untreated regions. We uncover the presence of important spillover effects: in treated regions, as the search effort of treated workers plummets, the job finding probability of untreated workers increases, and their average unemployment duration and probability of long term unemployment decrease. These effects are the largest when the program intensity reaches its highest level, then decrease and disappear as the program is scaled down and finally interrupted. We use this evidence to assess the relevance of different assumptions on technology and the wage setting process in equilibrium search and matching models and discuss the policy implications of our results for the EUC extensions in the US.
Subfields: Economics and Econometrics, Gender Studies
View Paper: https://www.semanticscholar.org/paper/263f68240ff1e7c060b64a8c11d98075855a1a4a
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Citations in the corpus
- Does Extending Unemployment Benefits Improve Job Quality? (2017, background): “Recent papers studied general equilibrium effect Hagedorn et al. (2013), Lalive et al. (2013), Landais et al. (2014), Marinescu (2014), and Di Maggio and Kermani (2015).”
- The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Noncontagious Absenteeism Behavior (2016, background): “Because a main theme of the paper is negative externalities, it also relates to papers that identify externalities in the context of UI (Lalive et al. 2015; Marinescu 2017), endogenous private insurance (Chetty and Saez 2010), or unhealthy consumption goods (O’Donoghue and Rabin 2006).”
- A Macroeconomic Approach to Optimal Unemployment Insurance: Theory (2018, unknown): “Finally, the elasticity wedge ( 1 − ε M / ε m ) is new to our formula, but a growing number of papers estimate it ( for example, Lalive, Landais, and Zweimüller 2015; Marinescu 2016; and Johnston and Mas 2016 .”
- Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut (2016, unknown): “Unlike Lalive et al. (2013), we find that the macro elasticity is at least as large as the micro elasticity.”