Timed to Say Goodbye: Does Unemployment Benefit Eligibility Affect Worker Layoffs?

Andrea Albanese, Corinna Ghirelli and Matteo Picchio

No 12171, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study how unemployment benefit eligibility affects the layoff exit rate by exploiting quasi-experimental variation in eligibility rules in Italy. By using a difference-indifferences estimator, we find an instantaneous increase of about 12% in the layoff probability when unemployment benefit eligibility is attained, which persists for about 16 weeks. These findings are robust to different identifying assumptions and are mostly driven by jobs started after the onset of the Great Recession, in the South and for small firms. We argue that the moral hazard from the employer's side is the main force driving these layoffs.

Keywords: difference-in-differences; employer-employee moral hazard; layoffs; unemployment insurance; heterogeneous effects (search for similar items in EconPapers)
JEL-codes: C31 C41 J21 J63 J65 (search for similar items in EconPapers)
Date: 2019-02
New Economics Papers: this item is included in nep-ias
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Citations: View citations in EconPapers (4)

Published - published in: Labour Economics , 2020, 65, 101846

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Related works:
Journal Article: Timed to Say Goodbye: Does Unemployment Benefit Eligibility Affect Worker Layoffs? (2020)
Working Paper: Timed to say goodbye: Does unemployment benefit eligibility affect worker layoffs? (2019)
Working Paper: Timed to say goodbye: does unemployment benefit eligibility affect worker layoffs? (2019)
Working Paper: Timed to Say Goodbye: Does Unemployment Benefit Eligibility Affect Worker Layoffs? (2019)
Working Paper: TIMED TO SAY GOODBYE: DOES UNEMPLOYMENT BENEFIT ELIGIBILITY AFFECT WORKER LAYOFFS? (2019)
Working Paper: Timed to Say Goodbye: Does Unemployment Benefit Eligibility Affect Worker Layoffs? (2019)
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