Should UI Eligibility Be Expanded to Low-Earning Workers? Evidence on Employment, Transfer Receipt, and Income from Administrative Data
Pauline Leung and
Additional contact information
Pauline Leung: Cornell University
No 15-236, Upjohn Working Papers and Journal Articles from W.E. Upjohn Institute for Employment Research
Recent efforts to expand unemployment insurance (UI) eligibility are expected to increase low-earning workers' access to UI. Although the expansion's aim is to smooth the income and consumption of previously ineligible workers, it is possible that UI benefits simply displace other sources of income. Standard economic models predict that UI delays reemployment, thereby reducing wage income. Additionally, low-earning workers are often eligible for benefits from means-tested programs, which may decrease with UI benefits. In this paper, we estimate the impact of UI eligibility on employment, means-tested program participation, and income after job loss using a unique individual-level administrative data set from the state of Michigan. To identify a causal effect, we implement a fuzzy regression discontinuity design around the minimum earnings threshold for UI eligibility. Our main finding is that while UI eligibility increases jobless durations by up to 25 percent and temporarily lowers receipt of cash assistance (TANF) by 63 percent, the net impact on total income is still positive and large. In the quarter immediately following job loss, UI-eligible workers have 46-61 percent higher incomes than ineligibles.
Keywords: Unemployment insurance; Temporary Assistance to Needy Families; TANF; Supplemental Nutrition Assistance Program; SNAP; Medicaid; welfare; public assistance; unemployment; social safety net (search for similar items in EconPapers)
JEL-codes: J65 I38 J68 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ias and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
http://research.upjohn.org/cgi/viewcontent.cgi?art ... ext=up_workingpapers (application/pdf)
This material is copyrighted. Permission is required to reproduce any or all parts.
Working Paper: Should UI Eligibility Be Expanded to Low-Earning Workers? Evidence on Employment, Transfer Receipt, and Income from Administrative Data (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:upj:weupjo:15-236
Access Statistics for this paper
More papers in Upjohn Working Papers and Journal Articles from W.E. Upjohn Institute for Employment Research 300 S. Westnedge Ave. Kalamazoo, MI 49007 USA. Contact information at EDIRC.
Bibliographic data for series maintained by ().