Unemployment Insurance Eligibility Research Articles

Job Displacement, Unemployment Benefits and Domestic Violence

We estimate impacts of male job loss, female job loss, and male unemployment benefits on domestic violence in Brazil. We merge employer-employee and social welfare registers with administrative data on domestic violence cases brought to criminal courts, use of public shelters by victims and mandatory notifications of domestic violence by health providers. Leveraging mass layoffs for identification, we find that both male and female job loss, independently, lead to large and pervasive increases in domestic violence. Exploiting a discontinuity in unemployment insurance eligibility, we find that eligible men are not less likely to commit domestic violence while benefits are being paid, and more likely to commit it once benefits expire. Our findings are consistent with job loss increasing domestic violence on account of a negative income shock and an increase in exposure of victims to perpetrators, with unemployment benefits partially off setting the income shock while reinforcing the exposure shock.

Job Displacement, Unemployment Benefits and Domestic Violence

We estimate impacts of male job loss, female job loss, and male unemployment benefits on domestic violence in Brazil. We merge employer-employee and social welfare registers with administrative data on domestic violence cases brought to criminal courts, use of public shelters by victims and mandatory notifications of domestic violence by health providers. Leveraging mass layoffs for identification, we find that both male and female job loss, independently, lead to large and pervasive increases in domestic violence. Exploiting a discontinuity in unemployment insurance eligibility, we find that eligible men are not less likely to commit domestic violence while benefits are being paid, and more likely to commit it once benefits expire. Our findings are consistent with job loss increasing domestic violence on account of a negative income shock and an increase in exposure of victims to perpetrators, with unemployment benefits partially offsetting the income shock while reinforcing the exposure shock.

Heterogeneous Impacts on Layoffs of Changes in Brazilian Unemployment Insurance Eligibility Rules

This paper is based on the first use of program administrative data from Brazil’s unemployment insurance (UI) program to assess the impact of changes in UI eligibility criteria on layoff probabilities. We exploit exogenous program changes introduced by executive and legislative changes in 2015 to estimate impacts while accounting for the number of prior UI benefit requests. We estimate that changes in UI eligibility criteria had heterogeneous impacts distinguished by the number of prior benefit requests. We show that the 2015 changes in UI eligibility rules reduced layoffs and find evidence that the changes reduced collusion between workers and employers for layoffs because it became harder to extract subsidies from the UI system. The layoff reductions were greatest before workers' second benefit request.

Who Helps the Unemployed? Young Workers' Receipt of Private Cash Transfers

Financial transfers provided to individuals from friends and family members in times of need are difficult to measure, yet the role of private, informal assistance in determining economic outcomes is important to identify, as private transfers may serve as a source of insurance for households. In this paper, I use longitudinal data from the Panel Study of Income Dynamics (PSID) to measure the extent to which an unemployment spell increases the likelihood that a young worker receives a cash transfer from family. Using within-person variation in unemployment and cash transfer receipt, I find that unemployment increases the probability a young worker receives financial assistance from their family by 50 percent. I then use cross-state and cross-year variation in public unemployment insurance eligibility to evaluate the relationship between the informal private insurance flowing to young unemployed workers and its public counterpart. The increase in the probability of receiving a family transfer is reduced by half if the worker is eligible for unemployment insurance. Hence, my paper provides evidence that family-provided insurance responds to income shocks but is also a function of available public insurance. This implies that the trend towards stricter UI eligibility is partially absorbed by family networks.

Losing a Job: The Nonpecuniary Cost of Unemployment in the United States

Drawing on the Panel Study of Income Dynamics, I track the subjective well-being of individuals as they enter and exit unemployment. Job loss is a salient trigger event that sets off large changes in well-being. The factors expected to improve the lot of the unemployed have limited efficacy: (1) changes in family income are not significantly correlated with well-being; (2) unemployment insurance eligibility seems to partly mitigate the effect of job loss, but is a poor substitute for work; and (3. even reemployment recovers only about two thirds of the initial harm of job loss, indicating a potential long-term scar effect of unemployment. This highlights the deep and intractable hardship caused by unemployment in America.

Labor market cycles, unemployment insurance eligibility, and moral hazard

If entitlement to UI benefits must be earned with employment, generous UI is an additional benefit to working, so, by itself, it promotes job creation. If individuals are risk neutral, then there is a UI contribution scheme that eliminates any effect of UI on employment decisions. As with Ricardian Equivalence, this result should be useful to pinpoint the effects of UI to violations of its premises. Our baseline simulation shows that if the neutral contribution scheme derived in this paper were to be implemented, the average unemployment rate in the United States would fall from 5.7 to 4.7 percent. Also, the results show that with endogenous UI eligibility, one can simultaneously generate realistic productivity driven cycles and realistic responses of unemployment to changes in UI benefits.

Unemployment Insurance and Low-Educated, Single, Working Mothers before and after Welfare Reform

Using the Survey of Income and Program Participation, this study examines changing levels of Unemployment Insurance (UI) eligibility and benefits receipt among low-educated, single mothers who entered unemployment between 1990 and 2005. It also examines changing participation in cash welfare and the Food Stamp Program (FSP). Data from 1990–94 and 2001–5 show that low-educated, single mothers who enter unemployment experience an increase in UI eligibility but not an increase in UI benefits receipt, when compared to low-educated, single, childless women who enter unemployment. Because of declining cash assistance receipt during 2001–5, UI becomes a more common income support for this population than cash assistance. Further, the probability of accessing the FSP increases among low-educated, single mothers who enter unemployment in 2001–5. As a result, the proportion of this population accessing benefits from at least one of these programs remains similar across the study period.

Unemployment Insurance and Low-Educated Single Working Mothers Before and After Welfare Reform

Using the Survey of Income and Program Participation (SIPP), a nationally representative, longitudinal survey, this study examines changing levels of Unemployment Insurance (UI) eligibility and benefit receipt among working low-educated single mothers, 199'22005. It also examines changing participation in cash welfare and the Food Stamp Program (FSP). Relative to single childless women, there has been no increase in UI benefit receipt among single mothers entering a spell of unemployment in the post-reform period, even though single mothers have increased their relative rates of UI eligibility. Because of declining cash assistance receipt, UI became a more common income support than cash assistance for this population during the period 2001-2005. Furthermore, the probability of accessing FSP for low-educated single mothers entering a spell of unemployment increased in the years 2001-2005. As a result, the proportion of this population accessing benefits from one or more of these programs remained virtually unchanged across the study period.

Effects of Changes in the Unemployment Insurance Eligibility Requirements on Job Duration — Swedish Evidence

AbstractThis paper investigates the impact of the unemployment insurance (UI) entrance requirement on employment duration among earlier unemployed in Sweden. I exploit changes in the rules taking place in 1994 and 1997 to study behavioural adjustments in the timing of job separation in 1992, 1996, and 1998, respectively. Performing across‐year analyses with years involving different working requirements, I find some evidence of clustering of job exits at the time of UI qualification. By using predicted hazard rates for each week, I calculate an approximate 2.3‐week extension in average employment duration between 1996 and 1998, due to the 5‐week prolonging of the entrance requirement.

Unemployment Insurance Eligibility Before and After Welfare Reform

ABSTRACT Welfare and unemployment insurance (UI) were designed to serve distinct populations, mothers and workers. As more women moved into the paid labor force, these previously separate groups have melded into a single group–working mothers. In this research, we analyze the likelihood of former welfare recipients being eligible for UI using data from the Survey of Income and Program Participation. Our analysis compares UI eligibility in the early 1990s (before welfare reform), with the late 1990s (after welfare reform). In general, we find that despite a strong labor market in the late 1990s relative to the early 1990s, former welfare recipients were less likely to meet the earnings requirements for UI eligibility, owing largely to an increase in the share of welfare leavers with little or no earnings.

Unemployment Insurance and Wealth Redistribution

This Article evaluates the merit of liberalizing unemployment insurance eligibility as a means to achieve progressive wealth redistribution-an idea that has recently gained popularity among policymakers and legal scholars. UI provides temporary, partial wage replacement to workers who suffer unexpected job loss, but it tends to exclude workers who have unstable, low-wage jobs (such as temporary workers), or who quit or limit their work hours (e.g., to accommodate family demands). I argue that while redistribution to these workers is a desirable goal, expanding UI is a poor way to do it. First, UI benefits are triggered not by low income potential, but rather by the incidence of job loss (which affects both wealthy and poor workers). Second, a comprehensive and ethical program of support for families with caregiving needs would have design features and goals that diverge sharply from UI. Instead of unemployment insurance, I argue, other methods such as direct tax and transfer programs and comprehensive family assistance programs are superior ways to transfer wealth to poor workers and families with caregiving obligations.

Bayesian Estimation and Smoothing of the Baseline Hazard in Discrete Time Duration Models

This paper proposes a Bayesian approach for estimating and smoothing the baseline hazard in a discrete time hazard model. The hazard model is specified as a multiperiod probit model and estimated using a Gibbs sampler with data augmentation. The baseline hazard specification is smoothed using the smoothness priors introduced by Shiller (1973). The methods proposed in this paper are then used to study the effect of Canadian Unemployment Insurance eligibility rules on employment durations from New Brunswick, Canada.

Institutional specifics and unemployment insurance eligibility in Canada: How sensitive are employment duration effects?

The paper examines the influence of unemployment insurance on the duration of employment spells in Canada using the 1988–90 Labour Market Activity Survey. The primary focus of the paper is to evaluate whether estimated UI effects are sensitive to the degree to which institutional rules and regulations governing UI eligibility and entitlement are explicitly modelled. The key result of the paper is that it is indeed important to allow for institutional detail when estimating unemployment insurance effects. Estimates using simple proxies for eligibility indicate small, often insignificant UI effects. The size and significance of the effects rise as more realistic versions of the variables are adopted. The estimates using the eligibility variables incorporating the greatest level of institutional detail suggest that a jump in the hazard rate by a factor of 2.3 may not be an unreasonable estimate of the effect.

Employment Spells and Unemployment Insurance Eligibility Requirements

In this paper we examine whether the requirements that workers must satisfy to qualify for unemployment insurance (UI) benefits in any succeeding period of joblessness affect the duration of employment spells. This behavioral consequence of a UI system has been neglected in empirical research, which has instead focused on the effects of UI parameters on the actions of the unemployed. The effect is identified by a unique change in the eligibility requirements of the Canadian UI system in 1990, which increased the weeks of employment required to establish UI eligibility. We provide a variety of estimates of this behavioral effect. In our preferred set of results, we find a significant increase in the employment hazard in the week that an individual satisfies the eligibility requirement in many regions of the country. In the spirit of Feldstein's (1976) study of temporary layoffs, the results provide new evidence of the impact of UI system parameters on the actions of employers and workers.

US Labour Market Policy and the Canada-US Unemployment Rate Gap

In this paper, we investigate the extent to which changes in US labour market policy in the 1980s may have contributed to the emergence of an unemployment rate gap between Canada and the United States. In that decade, unemployment insurance benefits became taxable, income tax rates fell substantially, and various administrative changes were made that effectively tightened unemployment insurance eligibility requirements. These policy changes are evaluated in the context of a computable equilibrium model of the labour market. Our estimates suggest that all of these reforms together can account for no more than a 0.4 percentage point decline in the US natural rate of unemployment; a combined effect which accounts for 20 percent of the unemployment rate gap.

Unemployment Insurance Eligibility and the Scholl-to-Work Transition in Canada and the United States

To study how the design of unemployment insurance (UI) affects people leaving school to find jobs, a model of job search in the presence of UI is developed and estimated for the United States and Canada. The level of UI benefits depends on previous earnings, which creates opposing incentives for unemployed people not receiving benefits. Which of these opposing incentives dominates the other is found to differ across demographic groups within each country. Changes in UI policy therefore can have very different effects on different individuals. The major differences found in the transition from school to work in Canada and the United States are a lower rate of job-offer arrivals and a lower rate of offer rejections in Canada. Within each country, offer-arrival rates differ across individuals much more than offer-rejection rates.

Unemployment Insurance Eligibility and the School-to-Work Transition in Canada and the United States

To study how the design of unemployment insurance affects people leaving school to find jobs, a model of job search in the presence of UI is developed and estimated for the US and Canada. The level of UI benefits depends upon previous earnings, a fact which creates opposing incentives for unemployed people not receiving benefits. Which of these opposing incentives dominates differs across demographic groups within each country. The major differences in the transition from school to work between Canada and the U.S. are a lower rate of job offer arrivals and a lower rate of offer rejections in Canada. Within each country, offer arrival rates differ across individuals much more than offer rejection rates. (This abstract was borrowed from another version of this item.)

Unemployment insurance eligibility rights: Evidence from a comparison of Australia and Canada

The Australian unemployment assistance scheme possesses two major features which differentiate it from North American programs. First, no qualifying period of employment is necessary. Second, benefits may be paid for an unlimited period. Analysis of the individual's work-leisure choice provides a number of predictions of the likely impact of these arrangements upon the probability of being in various labormarket states. These predictions are tested by comparing Australian unemployment flow and duration data with data for Canada.

The Effects of Unemployment Insurance Eligibility Rules on Job Quitting Behavior

In this paper we examine whether the requirements that workers must satisfy to qualify for unemployment insurance (UI) benefits in any succeeding period of joblessness affect the duration of employment spells. This behavioral consequence of a UI system ...