When Institutions Interact: How the Effects of Unemployment Insurance are Shaped by Retirement Policies

Matthew Gudgeon, Pablo Guzman-Pinto (), Johannes Schmieder, Simon Trenkle () and Han Ye

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: This paper shows empirically that the non-employment effects of unemployment insurance (UI) for older workers depend in a first-order way on the structure of retirement policies. Using German data, we first present reduced-form evidence of these interactions, documenting large bunching in UI inflows at the age that allows workers to claim their pension following UI expiration. We then estimate a dynamic life-cycle model and use it to directly quantify how the effects of UI vary with retirement policies. Accounting for interactions across UI and retirement institutions also helps explain otherwise difficult-to-explain trends in the unemployment rate of older German workers.

Keywords: Unemployment insurance; moral hazard; retirement; older workers; interactions (search for similar items in EconPapers)
JEL-codes: J26 J64 J65 (search for similar items in EconPapers)
Pages: 112
Date: 2023-12
New Economics Papers: this item is included in nep-age, nep-dge, nep-eec and nep-lab
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Working Paper: When Institutions Interact: How the Effects of Unemployment Insurance are Shaped by Retirement Policies (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2023_481

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