Unemployment insurance, Recalls and Experience Rating

Julien Albertini, Xavier Fairise () and Anthony Terriau

No 2014, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: In the US, almost half of unemployment spells end through recall. In this paper, we show that the probability of being recalled is much higher among unemployment benefit recipients than nonrecipients. We argue that a large part of the observed difference in recall shares is accounted for by the design of the unemployment insurance financing scheme characterized by an experience rating system. We develop a search and matching model with different unemployment insurance status, endogenous separations, recalls and new hires. We quantify what would have been the labor market under alternative financing scheme. In the absence of the experience rating, the hiring and separations would have been higher in the long run and more volatile. Experience rating system contributes significantly to the difference in recalls between the recipients and the nonrecipients.

Keywords: Search and matching; Layoffs; Recalls; Experience rating; Unemployment insurance (search for similar items in EconPapers)
JEL-codes: E23 E32 J63 J64 J65 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-dge, nep-ias and nep-mac
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ftp://ftp.gate.cnrs.fr/RePEc/2020/2014.pdf (application/pdf)

Related works:
Journal Article: Unemployment insurance, recalls, and experience rating (2023)
Working Paper: Unemployment insurance, recalls, and experience rating (2023)
Working Paper: Unemployment insurance, Recalls and Experience Rating (2020)
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