Abstract
In response to the recession of 2007–2009, the maximum duration of U.S. unemployment insurance (UI) benefits was extended to an unprecedented 99 weeks. We exploit variation in the timing and size of the UI benefit extensions across states to estimate their overall impact on unemployment exits, comparing the most recent and prior extension episodes. We find a small but statistically significant increase in labor force attachment due to extended UI in both periods with little or no impact on job finding. Despite these small estimates, extended benefits can account for a substantial share of the increase in long-term unemployment.
- Received December 2013.
- Accepted July 2014.
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In this issue
Jump to section
- Article
- Abstract
- I. Introduction
- II. UI Program Characteristics and Research
- III. Econometric Framework and Identification
- IV. Sample Definition and Data Issues
- V. Estimation of the Probit Model of Exit
- VI. How Large Is the Effect of Extended Benefits?
- VII. Concluding Remarks
- Appendix The Timing and Extent of Unemployment Insurance Extensions
- Footnotes
- References
- Figures & Data
- Info & Metrics
- References