Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/4787.html
   My bibliography  Save this paper

Unemployment Insurance Benefits and Takeup Rates

Author

Listed:
  • Patricia M. Anderson
  • Bruce D. Meyer
Abstract
Despite clear theoretical predictions of UI effects on takeup there is little work on the link between program generosity and the propensity to file for benefits. Administrative data allow us to assign the potential level and duration of benefits accurately for a sample of workers separating from their employers, whether or not UI was ever actually received. We then use these values along with marginal tax rates as our main explanatory variables in logit equation estimates of the probability that a separating employee receives UI. We find a strong positive effect of the benefit level on takeup, but little effect of the potential duration of benefits. The estimates imply elasticities of the takeup rate with respect to benefits of about 0.46 to 0.78. Our estimates also show that potential claimants respond to the tax treatment of benefits. Simulations of the effects of taxing UI benefits indicate that recent tax changes can account for most of the decline in UI receipt in the 1980's. In addition, we find theoretical and empirical support for the proposition that those with short unemployment spells are less likely to file. We show that if the decision to file for UI is affected by benefit levels and the expected duration of unemployment, it will bias estimates of the effects of UI on unemployment duration.

Suggested Citation

  • Patricia M. Anderson & Bruce D. Meyer, 1994. "Unemployment Insurance Benefits and Takeup Rates," NBER Working Papers 4787, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:4787
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w4787.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
    2. Topel, Robert H, 1983. "On Layoffs and Unemployment Insurance," American Economic Review, American Economic Association, vol. 73(4), pages 541-559, September.
    3. Gibbons, Robert & Katz, Lawrence F, 1991. "Layoffs and Lemons," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 351-380, October.
    4. Rebecca M. Blank & David E. Card, 1991. "Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1157-1189.
    5. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-1035, December.
    6. Kim B. Clark & Lawrence H. Summers, 1982. "Unemployment Insurance and Labor Force Transitions," NBER Working Papers 0920, National Bureau of Economic Research, Inc.
    7. Lawrence F. Katz, 1986. "Layoffs, Recall and the Duration of Unemployment," NBER Working Papers 1825, National Bureau of Economic Research, Inc.
    8. Katz, Lawrence F. & Meyer, Bruce D., 1990. "The impact of the potential duration of unemployment benefits on the duration of unemployment," Journal of Public Economics, Elsevier, vol. 41(1), pages 45-72, February.
    9. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
    10. Anderson, Patricia M & Meyer, Bruce D, 1993. "Unemployment Insurance in the United States: Layoff Incentives and Cross Subsidies," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 70-95, January.
    11. Anderson, Patricia M, 1992. "Time-Varying Effects of Recall Expectation, a Reemployment Bonus, and Job Counseling on Unemployment Durations," Journal of Labor Economics, University of Chicago Press, vol. 10(1), pages 99-115, January.
    12. Card, David & Levine, Phillip B., 1994. "Unemployment insurance taxes and the cyclical and seasonal properties of unemployment," Journal of Public Economics, Elsevier, vol. 53(1), pages 1-29, January.
    13. Martin S. Feldstein, 1975. "The Importance of Temporary Layoffs: An Empirical Analysis," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 6(3), pages 725-745.
    14. Patricia M. Anderson & Bruce D. Meyer, 1994. "The Extent and Consequences of Job Turnover," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1994 Micr), pages 177-248.
    15. Lawrence F. Katz & Bruce D. Meyer, 1990. "Unemployment Insurance, Recall Expectations, and Unemployment Outcomes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(4), pages 973-1002.
    16. Murphy, Kevin M & Topel, Robert H, 1997. "Unemployment and Nonemployment," American Economic Review, American Economic Association, vol. 87(2), pages 295-300, May.
    17. Feldstein, Martin S, 1978. "The Effect of Unemployment Insurance on Temporary Layoff Unemployment," American Economic Review, American Economic Association, vol. 68(5), pages 834-846, December.
    18. Patricia M. Anderson & Bruce D. Meyer, 1994. "The Effects of Unemployment Insurance Taxes and Benefits on Layoffs Using Firm and Individual Data," NBER Working Papers 4960, National Bureau of Economic Research, Inc.
    19. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
    20. Dale T. Mortensen, 1990. "A Structural Model of Unemployment Insurance Benefit Effects on the Incidence and Duration of Unemployment," Palgrave Macmillan Books, in: Yoram Weiss & Gideon Fishelson (ed.), Advances in the Theory and Measurement of Unemployment, chapter 3, pages 57-81, Palgrave Macmillan.
    21. Gary Burtless, 1983. "Why Is Insured Unemployment So Low?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 14(1), pages 225-254.
    22. Jacob Mincer, 1991. "Education and Unemployment," NBER Working Papers 3838, National Bureau of Economic Research, Inc.
    23. Joseph G. Altonji & Nicolas Williams, 1992. "The Effects of Labor Market Experience, Job Seniority, and Job Mobility on Wage Growth," NBER Working Papers 4133, National Bureau of Economic Research, Inc.
    24. Gottschalk, Peter & Maloney, Tim, 1985. "Involuntary Terminations, Unemployment, and Job Matching: A Test of Job Search Theory," Journal of Labor Economics, University of Chicago Press, vol. 3(2), pages 109-123, April.
    25. Ronald G. Ehrenberg, 1985. "Workers' Compensation, Wages, and the Risk of Injury," NBER Working Papers 1538, National Bureau of Economic Research, Inc.
    26. Rosen, Harvey S, 1976. "Taxes in a Labor Supply Model with Joint Wage-Hours Determination," Econometrica, Econometric Society, vol. 44(3), pages 485-507, May.
    27. McCall, Brian P, 1995. "The Impact of Unemployment Insurance Benefit Levels on Recipiency," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 189-198, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carl Davidson & Stephen A. Woodbury, 2000. "Wage-Rate Subsidies for Dislocated Workers," Book chapters authored by Upjohn Institute researchers, in: Laurie J. Bassi & Stephen A. Woodbury (ed.),Long-term Unemployment and Reemployment Policies, pages 141-184, W.E. Upjohn Institute for Employment Research.
    2. Blasco, Sylvie & Fontaine, Francois, 2021. "Unemployment Duration and the Take-up of Unemployment Insurance," IZA Discussion Papers 14038, Institute of Labor Economics (IZA).
    3. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-161, April.
    4. Rafael Lalive & Josef Zweim�ller, "undated". "Benefit Entitlement and the Labor Market: Evidence from a Large-Scale Policy Change," IEW - Working Papers 105, Institute for Empirical Research in Economics - University of Zurich.
    5. Meyer, Bruce D, 1996. "What Have We Learned from the Illinois Reemployment Bonus Experiment?," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 26-51, January.
    6. Kapsalis, Constantine, 2000. "The Impact of Bill C-12 on New Entrants and Re-Entrants," MPRA Paper 26137, University Library of Munich, Germany.
    7. Dalit Contini & Matteo Richiardi, 2009. "Welfare stigma with decreasing employability," LABORatorio R. Revelli Working Papers Series 90, LABORatorio R. Revelli, Centre for Employment Studies.
    8. Patricia M. Anderson & Bruce D. Meyer, 1994. "The Effects of Unemployment Insurance Taxes and Benefits on Layoffs Using Firm and Individual Data," NBER Working Papers 4960, National Bureau of Economic Research, Inc.
    9. Glismann, Hans H. & Schrader, Klaus, 2001. "Alternative Systeme der Arbeitslosenversicherung: das Beispiel der Vereinigten Staaten und des Vereinigten Königreichs," Kiel Working Papers 1032, Kiel Institute for the World Economy (IfW Kiel).
    10. Carl Davidson & Stephen A. Woodbury, 2001. "From Social Experiment to Program," Book chapters authored by Upjohn Institute researchers, in: Philip K. Robins & Robert G. Spiegelman (ed.), Reemployment Bonuses in the Unemployment Insurance System: Evidence from Three Field Experiments, chapter 6, pages 175-222, W.E. Upjohn Institute for Employment Research.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392, Elsevier.
    2. repec:eee:labchp:v:3:y:1999:i:pc:p:3085-3139 is not listed on IDEAS
    3. Milan Vodopivec, 2004. "Income Support for the Unemployed : Issues and Options," World Bank Publications - Books, The World Bank Group, number 14922.
    4. Vodopivec, Milan & Raju, Dhushyanth, 2002. "Income support systems for the unemployed : issues and options," Social Protection Discussion Papers and Notes 25529, The World Bank.
    5. Patricia M. Anderson & Bruce D. Meyer, 1994. "The Effects of Unemployment Insurance Taxes and Benefits on Layoffs Using Firm and Individual Data," NBER Working Papers 4960, National Bureau of Economic Research, Inc.
    6. Peter Fredriksson & Bertil Holmlund, 2006. "Improving Incentives in Unemployment Insurance: A Review of Recent Research," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 357-386, July.
    7. Albertini, Julien & Fairise, Xavier & Terriau, Anthony, 2023. "Unemployment insurance, recalls, and experience rating," Journal of Macroeconomics, Elsevier, vol. 75(C).
    8. Jonathan Gruber & Julie Berry Cullen, 1996. "Spousal Labor Supply as Insurance: Does Unemployment Insurance Crowd Outthe Added Worker Effect?," NBER Working Papers 5608, National Bureau of Economic Research, Inc.
    9. Holmlund, Bertil, 1997. "Unemployment Insurance in Theory and Practice," Working Paper Series 1997:25, Uppsala University, Department of Economics.
    10. Roed, Knut & Nordberg, Morten, 2003. "Temporary layoffs and the duration of unemployment," Labour Economics, Elsevier, vol. 10(3), pages 381-398, June.
    11. Rebollo-Sanz, Yolanda, 2012. "Unemployment insurance and job turnover in Spain," Labour Economics, Elsevier, vol. 19(3), pages 403-426.
    12. Bruce D. Meyer, 1992. "Policy Lessons from the U.S. Unemployment Experiments," NBER Working Papers 4197, National Bureau of Economic Research, Inc.
    13. Audrey Light & Yoshiaki Omori, 2004. "Unemployment Insurance and Job Quits," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 159-188, January.
    14. Bruce D. Meyer, 1989. "A Quasi-Experimental Approach to the Effects of Unemployment Insurance," NBER Working Papers 3159, National Bureau of Economic Research, Inc.
    15. Tali Regev, 2006. "Unemployment insurance and the uninsured," Working Paper Series 2006-48, Federal Reserve Bank of San Francisco.
    16. Bernardus Van Doornik & David Schoenherr & Janis Skrastins, 2018. "Unemployment Insurance, Strategic Unemployment and Firm-Worker Collusion," Working Papers Series 483, Central Bank of Brazil, Research Department.
    17. Rafael Lalive & Josef Zweim�ller, "undated". "Benefit Entitlement and the Labor Market: Evidence from a Large-Scale Policy Change," IEW - Working Papers 105, Institute for Empirical Research in Economics - University of Zurich.
    18. David T. Ellwood, 2001. "The Sputtering Labor Force of the 21st Century. Can Social Policy Help?," NBER Working Papers 8321, National Bureau of Economic Research, Inc.
    19. Stepan Jurajda, 2001. "In ow into Unemployment: Employment Spells and Unemployment Insurance," Labor and Demography 0012008, University Library of Munich, Germany.
    20. Meyer, Bruce D, 1996. "What Have We Learned from the Illinois Reemployment Bonus Experiment?," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 26-51, January.
    21. Raj Chetty, 2005. "Why do Unemployment Benefits Raise Unemployment Durations? Moral Hazard vs. Liquidity," NBER Working Papers 11760, National Bureau of Economic Research, Inc.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:4787. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.