Discussion Paper Details

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Title: Individual and Market-Level Effects of UI Policies: Evidence from Missouri

Author(s): Fatih Karahan, Kurt Mitman and Brendan Moore

Publication Date: November 2019

Keyword(s): search, unemployment, Unemployment insurance and Vacancies

Programme Area(s): Labour Economics and Monetary Economics and Fluctuations

Abstract: We develop a method to jointly measure the response of worker search effort (individual effect) and vacancy creation (market-level effect) to changes in the duration of unemployment insurance (UI) benefits. To implement this approach, we exploit an unexpected cut in UI durations in Missouri and provide quasi-experimental evidence on the effect of UI on the labor market. The data indicate that the cut in Missouri significantly increased job finding rates by both raising the search effort of unemployed workers and the availability of jobs. The latter accounts for at least a third and up to 100 of the total effect.

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Bibliographic Reference

Karahan, F, Mitman, K and Moore, B. 2019. 'Individual and Market-Level Effects of UI Policies: Evidence from Missouri'. London, Centre for Economic Policy Research.