A quantitative analysis of unemployment benefit extensions

Makoto Nakajima ()

Journal of Monetary Economics, 2012, vol. 59, issue 7, 686-702

Abstract: Extensions of unemployment insurance (UI) benefits have been implemented in response to the Great Recession. This paper measures the effect of these extensions on the unemployment rate using a calibrated structural model featuring job search and consumption-saving decisions, skill depreciation, and UI eligibility. The ongoing UI benefit extensions are found to have raised the unemployment rate by 1.4 percentage points, which is about 30% of the observed increase since 2007. Moreover, the contribution of the UI benefit extensions to the elevated unemployment rate increased during 2009–2011; while the number of vacancies recovered, the successive extensions kept search intensity down.

Date: 2012
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Related works:
Working Paper: A quantitative analysis of unemployment benefit extensions (2011)
Working Paper: A Quantitative Analysis of Unemployment Benefit Extensions (2011)
Working Paper: Quantitative Analysis of Unemployment Benefit Extensions (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:59:y:2012:i:7:p:686-702

DOI: 10.1016/j.jmoneco.2012.09.005

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