When Institutions Interact: How the Effects of Unemployment Insurance are Shaped by Retirement Policies

Matthew Gudgeon, Pablo Guzman, Johannes Schmieder, Simon Trenkle and Han Ye

No 31807, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper shows empirically that the non-employment effects of unemployment insurance (UI) for older workers depend in a first-order way on the structure of retirement policies. Using German data, we first present reduced-form evidence of these interactions, documenting large bunching in UI inflows at the age that allows workers to claim their pension following UI expiration. We then estimate a dynamic life-cycle model and use it to directly quantify how the effects of UI vary with retirement policies. Accounting for interactions across UI and retirement institutions also helps explain otherwise difficult-to-explain trends in the unemployment rate of older German workers.

JEL-codes: E24 J2 J26 J6 J63 J64 J65 J68 (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-age, nep-dge, nep-eur and nep-lab
Note: AG LS PE
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Working Paper: When Institutions Interact: How the Effects of Unemployment Insurance are Shaped by Retirement Policies (2023)
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