Delayed Collection of Unemployment Insurance in Recessions

Zoe Xie

No 2019-14, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: Using variations in unemployment insurance policies over time and across U.S. states, this paper provides evidence that allowing unemployed workers to delay the collection of benefits increases their job-finding rate. In a model with discrete job take-up decisions, benefit entitlement, wage-indexed benefits, and heterogeneous job types, I demonstrate that the policy can increase an unemployed worker's willingness to work, even though more benefits in general reduce the relative value of employment. In a calibrated quantitative model, I find that allowing delayed benefit collection increases the overall job finding rates and may lower the unemployment rate both in a steady state stationary economy and over a transition path during 2008?12.

Keywords: health; frailty index; life cycle profiles (search for similar items in EconPapers)
JEL-codes: E24 J65 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2019-06-01
New Economics Papers: this item is included in nep-dge, nep-ias, nep-lab and nep-mac
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Related works:
Journal Article: Delayed collection of unemployment insurance in recessions (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedawp:2019-14

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DOI: 10.29338/wp2019-14

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