Does Extending Unemployment Benefits Improve Job Quality?
By Arash Nekoei, Andrea Weber. Social Science Research Network, 2017
253 citations recorded by the source corpus.
Contrary to standard search model predictions, prior studies failed to estimate a positive effect of unemployment insurance (UI) on reemployment wages. This paper estimates a positive UI wage effect exploiting an age-based regression discontinuity in Austrian administrative data. A search model incorporating duration dependence determines the UI wage effect as the balance between two offsetting forces: UI causes agents to seek higher-wage jobs, but also reduces wages by lengthening unemployment. This implies a negative relationship between the UI unemployment duration and wage effects, which holds empirically both in our sample and across studies, reconciling disparate wage-effect estimates. Empirically, UI raises wages by improving reemployment firms' quality and attenuating wage drops.
Subfields: Demography, Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/ab6c596980a821595e005396029879968f1019f9
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Citations in the corpus
- The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Noncontagious Absenteeism Behavior (2016, background): “Welfare gains could be the value of leisure time (Fadlon and Nielsen 2015), higher liquidity (Nyman 2003; Chetty 2008), or better job matches in case of unemployment benefits (van Ours and Vodopivec 2008; Schmieder, von Wachter, and Bender Schmieder et al.; Nekoei and Weber 2017).”
- Knowledge of Future Job Loss and Implications for Unemployment Insurance (2017, methodology): “…individuals are insured against unemployment and income shocks7 and their behavioral response to these adverse events.8 The methods of this paper are related to a broad literature using subjective expectation data to identify properties of individual beliefs (Pistaferri (2001); Manski (2004)).”