Unemployment and Unemployment Insurance
Sunday, Jan. 6, 2019 10:15 AM - 12:15 PM
- Chair: Marta Lachowska, W.E. Upjohn Institute for Employment Research
Job search behavior and unemployment insurance
AbstractIn models of job search, unemployment benefits lengthen unemployment duration by decreasing search effort and increasing job selectivity or the reservation wage, but few studies can shed light on these mechanisms. I provide new evidence on job search behaviors using audits of unemployment insurance claimants surveyed as part of the US Department of Labor's Benefit Accuracy Management program. When state unemployment is high, claimants have lower reservation wages and search for lower-paying occupations. Reservation wages are strongly predictive of reemployment earnings and, in a regression kink design, I find that they positively respond to unemployment benefits. Search effort (measured by the number of weekly work contacts) and occupational choice show no response to benefits.
Why Do Half of Unemployment Benefits Go Unclaimed?
AbstractOn average, only 50 percent of those eligible for unemployment insurance benefits actually collect them. We use a mixed proportional hazards model to estimate the joint decision to start collecting and the probability of returning to work. This approach yields two novel finding with policy implications. First, we find the benefit take-up decision is dynamic and jointly determined with the labor market participation decision. Second, for households with less income and liquidity, the need to find a job quickly appears to outweigh the liquidity provided by unemployment benefits, suggesting current benefit levels may be sub-optimally low.
Stephen A. Woodbury,
Michigan State University
W.E. Upjohn Institute for Employment Research
- J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers