American Economic Review: Insights
ISSN 2640-205X (Print) | ISSN 2640-2068 (Online)
Disemployment Effects of Unemployment Insurance: A Meta-analysis
American Economic Review: Insights
(pp. 1–18)
Abstract
We systematically review studies of how unemployment benefits affect unemployment duration. Statistically significant findings are eight times more likely to be published. Correcting for publication bias cuts the average elasticity by a third. Meta-analysis is a data-driven way to aggregate estimates across policy contexts and generalize sufficient statistics methods to compute the global optimal policy. Although existing consumption drop-based approaches typically imply an optimal replacement rate near zero, our corrected estimate simply an optimal replacement rate of 28 percent in the United States. We are unable to reject the hypothesis that the "micro" elasticity is equal to the "macro" elasticity.Citation
Cohen, Jonathan P., and Peter Ganong. 2026. "Disemployment Effects of Unemployment Insurance: A Meta-analysis." American Economic Review: Insights 8 (1): 1–18. DOI: 10.1257/aeri.20240441Additional Materials
JEL Classification
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- J64 Unemployment: Models, Duration, Incidence, and Job Search
- J65 Unemployment Insurance; Severance Pay; Plant Closings