Unemployment Insurance and Worker Reallocation

Morten Grindaker () and Michael Simmons
Additional contact information
Morten Grindaker: University of Chicago

No 1039, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: Does Unemployment Insurance affect how employed workers search for new jobs? We provide novel evidence by combining administrative data on the universe of Norwegian workers and firms with a regression kink design. A marginal increase in benefits lowers job-to-job transitions, increases unemployment incidence, and lowers future earnings. These effects are stronger for workers with higher predicted unemployment risk and align with job search models where workers systematically move towards safer jobs. In an equilibrium job search model calibrated to match these empirical effects, employed workers’ responses account for 45 percent of the net fiscal costs of a marginal benefit expansion.

Keywords: On the job search; Unemployment Insurance; Regression kink design; Unemployment Risk (search for similar items in EconPapers)
JEL-codes: G33 G52 H31 H55 J31 J65 (search for similar items in EconPapers)
Pages: 77 pages
Date: 2025-10-24
New Economics Papers: this item is included in nep-bec, nep-dge, nep-eur, nep-hrm and nep-pbe
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.usbe.umu.se/ues/ues1039.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:umnees:1039

Access Statistics for this paper

More papers in Umeå Economic Studies from Umeå University, Department of Economics Department of Economics, Umeå University, S-901 87 Umeå, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by David Skog ().