The Impact of Unemployment Insurance Benefits on Reemployment Success

Burgess, Paul L.; Kingston, Jerry L.

doi:10.2307/2522749

Cited by 27 publications

(17 citation statements)

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“…41 None of the papers listed report coefficients in the form of an elasticity, so their coefficients have been transformed into approximate elasticities using mean values of wages and benefit levels. Classen (1977) and Holen (1977) do not provide summary statistics, so I use mean values from Burgess and Kingston (1976), who use a smaller version of the dataset used by Holen (1977). Additionally, the estimate listed for Meyer (1989) is from one of 10 individual regressions; the author does not designate a preferred estimate, so the basic difference-in-differences is used.…”

Section: Results With Effects Of Ui On Wagesmentioning

confidence: 99%

Fiscal Externalities and Optimal Unemployment Insurance

Lawson

2017

American Economic Journal: Economic Policy

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A common finding of the optimal unemployment insurance literature is that the optimal UI replacement rate is around 50%, implying that current levels in the US are close to optimal. However, a key assumption in the existing literature is that unemployment benefits are the only government spending activity. In this paper I show that recommendations for optimal UI levels are dramatically reduced when one incorporates the fact that UI spending is a small part of overall government spending. This occurs because the negative impact of UI on income tax revenues implies added welfare costs, a mechanism that I refer to as a fiscal externality. Using both a calibrated structural job search model and a "sufficient statistics" method that relies on reduced-form elasticities, I find that the optimal replacement rate drops to zero once fiscal externalities are incorporated. However, I also consider the possibility that more generous UI could increase reservation wages and thus potentially increase the tax base, and I show that this second fiscal externality could have important effects on the results, with an optimal replacement rate which could rise above 70%.

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Section: Results With Effects Of Ui On Wagesmentioning

confidence: 99%

Fiscal Externalities and Optimal Unemployment Insurance

Lawson

2017

American Economic Journal: Economic Policy

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“…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.…”

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confidence: 99%

Labor Market Effects of Unemployment Insurance Design

Tatsiramos

Ours

2012

Journal of Economic Surveys

126

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With the emergence of the Great Recession unemployment insurance (UI) is once again at the heart of the policy debate. In this paper, we focus on the recent theoretical and empirical evidence on the labor market e↵ects of UI design. We provide an overview of the design of UI in various countries and we discuss policy issues related to the structure of the UI system, including the pros and cons of a UI system in which the generosity of UI benefits is varying over the business cycle. Finally, we identify potential areas of future research on UI design.

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“…9 Early studies for the U.S., e.g. from Ehrenberg and Oaxaca (1976), Burgess andKingston (1976), andHolen (1977) estimated the impact of an increase in unemployment benefits or benefit duration on reemployment wages and show positive significant effects for certain groups. But other studies for the U.S. as Classen (1977) and Blau and Robins (1986) find no significant effects or as Addison and Blackburn (2000) only small and marginally significant positive impacts of unemployment benefits on wages.…”

Section: Empirical Literature Reviewmentioning

confidence: 99%

The effects of productivity and benefits on unemployment: Breaking the link

et al. 2021

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte.In the standard macroeconomic search and matching model of the labor market, there is a tight link between the quantitative effects of (i) aggregate productivity shocks on unemployment and (ii) unemployment benefits on unemployment. This tight link is at odds with the empirical literature. We show that a two-sided model of labor market search where the household and firm decisions are decomposed into job offers, job acceptances, firing, and quits can break this link. In such a model, unemployment benefits affect households' behavior directly, without having to run via the bargained wage. A calibration of the model based on U.S. JOLTS data generates both a solid amplification of productivity shocks and a moderate effect of benefits on unemployment. Our analysis shows the importance of investigating the effects of policies on the households' work incentives and the firms' employment incentives within the search process.

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The Impact of Unemployment Insurance Benefits on Reemployment Success

Cited by 27 publications

References 0 publications

Fiscal Externalities and Optimal Unemployment Insurance

Fiscal Externalities and Optimal Unemployment Insurance

Labor Market Effects of Unemployment Insurance Design

The effects of productivity and benefits on unemployment: Breaking the link

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