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