Citation

Discussion Paper Details

Please find the details for DP10568 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Does Extending Unemployment Benefits Improve Job Quality?

Author(s): Arash Nekoei and Andrea Weber

Publication Date: May 2015

Keyword(s): job search, regression discontinuity design, unemployment insurance and wages

Programme Area(s): Labour Economics

Abstract: Contrary to standard search model predictions, prior studies failed to estimate a positive effect of unemployment insurance (UI) on reemployment wages. This paper estimates a positive UI wage effect exploiting an age-based regression discontinuity in Austrian administrative data. A search model incorporating duration dependence determines the UI wage effect as the balance between two offsetting forces: UI causes agents to seek higher-wage jobs, but also reduces wages by lengthening unemployment. This implies a negative relationship between the UI unemployment duration and wage effects, which holds empirically both in our sample and across studies, reconciling disparate wage-effect estimates. Empirically, UI raises wages by improving reemployment firmsí quality and attenuating wage drops.

For full details and related downloads, please visit: http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=10568

Bibliographic Reference

Nekoei, A and Weber, A. 2015. 'Does Extending Unemployment Benefits Improve Job Quality?'. London, Centre for Economic Policy Research. http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=10568