Employment Spells And Unemployment Insurance Eligibility Requirements

Michael Baker and Samuel Rea

The Review of Economics and Statistics, 1998, vol. 80, issue 1, 80-94

Abstract: In this paper we examine whether the requirements that workers must satisfy to qualify for unemployment insurance (UI) benefits in any succeeding period of joblessness affect the duration of employment spells. This behavioral consequence of a UI system has been neglected in empirical research, which has instead focused on the effects of UI parameters on the actions of the unemployed. The effect is identified by a unique change in the eligibility requirements of the Canadian UI system in 1990, which increased the weeks of employment required to establish UI eligibility. We provide a variety of estimates of this behavioral effect. In our preferred set of results, we find a significant increase in the employment hazard in the week that an individual satisfies the eligibility requirement in many regions of the country. In the spirit of Feldstein's (1976) study of temporary layoffs, the results provide new evidence of the impact of UI system parameters on the actions of employers and workers. © 1998 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Date: 1998
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Working Paper: Employment Spells and Unemployment Insurance Eligibility Requirements (1994)
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