RT Journal Article
SR Electronic
T1 How Income Changes During Unemployment: Evidence from Tax Return Data
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
DO 10.3368/jhr.52.2.0414-6319R2
A1 Kawano, Laura
A1 LaLumia, Sara
YR 2016
UL http://jhr.uwpress.org/content/early/2016/03/04/jhr.52.2.0414-6319R2.abstract
AB We use a panel of tax returns spanning 1999 to 2011 to provide evidence on household experiences during unemployment. A period of unemployment is associated with a 20 percent reduction in annual household wage earnings. Unemployment insurance compensates for half of lost wages. Households also partially compensate using a variety of income sources. Distributions from retirement accounts increase in the short run. Self-employment income and disability insurance payments increase over longer periods. More generous UI benefits crowd out wage income and are associated with increased retirement account distributions. This combination of responses is consistent with UI benefits lengthening unemployment spells.