Abstract
Abstract This paper examines short and long term labor force responses to unemployment insurance. The findings conform to the conventional view that comparatively generous unemployment insurance programs encourage joblessness over the short term. Over the longer term, however, a distributive lag occurs wherein joblessness inversely relates to past durations of insured unemployment. Hence, unemployment benefits appear to reduce joblessness over the long term despite their tendency to stimulate short term increases in joblessness. Since most previous studies consider only short term relationships, future work should consider theoretical models sensitive to both short and long term relationships. Future studies also need to explicate how labor force responses to unemployment insurance interact with the business cycle.
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