Effects of Unemployment Insurance Entitlement on Duration and Job Search Outcome

Labor Market Effects of Unemployment Insurance Design

“…See Ehrenberg and Oaxaca (), Burgess and Kingston (), Hoelen (), Blau and Robins (). Classen () finds no relationship between the level of UI benefits and re‐employment wages.…”

Post‐unemployment wages, the probability of re‐employment, and the unemployment benefit

“…In addition, he notes that when data for more than one state are used, the maximum benefit is likely to be higher in states with higher incomes, such that a correlation between the benefit and the post-unemployment wage may be spurious. Ehrenberg and Oaxaca (1976), Classen (1979), Holen (1977), and Burgess and Kingston (1976) and recently Kiefer and Neumann (1989) have estimated the effect of the unemployment benefit on the post-unemployment wage in the U.S. These studies have noted the effect of the benefit on financing a longer job search for a better job match.…”

“…Most notably, Ehrenberg and Oaxaca (1976) have estimated wage gains of 7% for a 0.1 increase in the benefit replacement ratio for older men, a 1.5% increase for mature women, and no effects for young job seekers. Burgess and Kingston (1976), and Holen (1977) show increases in the post-unemployment wage, while Classen (1979) finds no effect. These studies note a number of truncation problems in their samples and their duration measures.…”

“…Studies by Ehrenberg and Oaxaca (1976), Burgess and Kingston (1976), Classen (1977), Holen (1977), and Kiefer and Neumann (1987) which have estimated the effect of the benefit on the post-unemployment wage rate in the U.S., provide inconclusive results on this question. Measurement problems are noted in this literature, in particular, in 1 The effect'of costs of search on adjustments of the reservation wage has received attention in the literature.…”

Job search incentives and job match quality

“…The first is the empirical literature on the impacts of unemployment duration and UI generosity on subsequent job quality. While the early contributions to this literature (Ehrenberg and Oaxaca, 1976;Burgess and Kingston, 1976;Hoelen, 1977) tended to find favorable impacts of time invested in job search, the more recent evidence is mixed. 1 Based on a quasi-natural experiment, Van Ours and Vodopivec (2008) find that a reform that shortened the maximum duration of UI benefits in Slovenia reduced the duration of unemployment sharply, while leaving the post-unemployment wages and job duration unaffected.…”