Market externalities of large unemployment insurance extension programs

Rafael Lalive, Camille Landais and Josef Zweimüller ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We provide evidence that unemployment insurance affects equilibrium conditions in the labor market, which creates significant market externalities. We provide a framework for identification of such equilibrium effects and implement it using the Regional Extension Benefit Program in Austria which extended the duration of UI benefits for a large group of eligible workers in selected regions of Austria. We show that non-eligible workers in REBP regions have higher job finding rates, lower unemployment durations, and a lower risk of long-term unemployment. We discuss the implications of our results for optimal UI policy.

Keywords: unemployment; insurance (search for similar items in EconPapers)
JEL-codes: H23 J64 (search for similar items in EconPapers)
Date: 2015-12-01
New Economics Papers: this item is included in nep-ias
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Citations: View citations in EconPapers (128)

Published in American Economic Review, 1, December, 2015, 105(12), pp. 3564-3596. ISSN: 0002-8282

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http://eprints.lse.ac.uk/64566/ Open access version. (application/pdf)

Related works:
Journal Article: Market Externalities of Large Unemployment Insurance Extension Programs (2015)
Working Paper: Market Externalities of Large Unemployment Insurance Extension Programs (2013)
Working Paper: Market Externalities of Large Unemployment Insurance Extension Programs (2013)
Working Paper: Market Externalities of Large Unemployment Insurance Extension Programs (2013)
Working Paper: Market Externalities of Large Unemployment Insurance Extension Programs (2013)
Working Paper: Market Externalities of Large Unemployment Insurance Extension Programs (2013)
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