This study documents two potential biases in recent analyses of UI benefit extensions using boundary-based identification: bias from using county-level aggregates and bias from across-border policy spillovers. To examine the first bias, the analysis uses a regression discontinuity approach that accounts for measurement error in county-level aggregates. These results suggest much smaller effects than previous studies, casting doubt on the applicability of border-based designs. The analysis then shows substantial spillover effects of UI benefit duration on across-border work patterns, consistent with increased tightness in high-benefit states and providing evidence against a dominant vacancy reduction response to UI extensions.
Dieterle, Steven, Otávio Bartalotti, and Quentin Brummet.
"Revisiting the Effects of Unemployment Insurance Extensions on Unemployment: A Measurement-Error-Corrected Regression Discontinuity Approach."
American Economic Journal: Economic Policy,
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Business Fluctuations; Cycles
Time Allocation and Labor Supply
Unemployment: Models, Duration, Incidence, and Job Search
Unemployment Insurance; Severance Pay; Plant Closings