Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut

Andrew Johnston and Alexandre Mas

No 22411, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine how a 16-week cut in potential unemployment insurance (UI) duration in Missouri affected search behavior of UI recipients and the aggregate labor market. Using a regression discontinuity design (RDD), we estimate a marginal effect of maximum duration on UI and nonemployment spells of approximately 0.5 and 0.3 respectively. We use RDD estimates to simulate the unemployment rate assuming no market-level externalities. The simulated response closely approximates the estimated change in the unemployment rate following the benefit cut, suggesting that even in a period of high unemployment the labor market absorbed this influx of workers without crowding-out other jobseekers.

JEL-codes: E24 H0 J6 J64 J65 (search for similar items in EconPapers)
Date: 2016-07
New Economics Papers: this item is included in nep-ias, nep-lab, nep-mac and nep-pbe
Note: EFG LS PE
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Citations: View citations in EconPapers (18)

Published as Andrew C. Johnston & Alexandre Mas, 2018. "Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut," Journal of Political Economy, vol 126(6), pages 2480-2522.

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Related works:
Working Paper: Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut (2020)
Journal Article: Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut (2018)
Working Paper: Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut (2015)
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