Recent Extensions of U.S. Unemployment Benefits: Search Responses in Alternative Labor Market States

51 Pages Posted: 21 Jun 2014

See all articles by Robert G. Valletta

Robert G. Valletta

Federal Reserve Bank of San Francisco; IZA Institute of Labor Economics

Abstract

In response to the 2007-09 “Great Recession,” the maximum duration of U.S. unemployment benefits was increased from the normal level of 26 weeks to an unprecedented 99 weeks. I estimate the impact of these extensions on job search, comparing them with the more limited extensions associated with the milder 2001 recession. The analyses rely on monthly matched microdata from the Current Population Survey. I find that a 10-week extension of UI benefits raises unemployment duration by about 1.5 weeks, with little variation across the two episodes. This estimate lies in the middle-to-upper end of the range of past estimates.

Keywords: unemployment benefits, job search

JEL Classification: J64, J65

Suggested Citation

Valletta, Robert G., Recent Extensions of U.S. Unemployment Benefits: Search Responses in Alternative Labor Market States. IZA Discussion Paper No. 8247. Available at SSRN: https://ssrn.com/abstract=2457350

Robert G. Valletta (Contact Author)

Federal Reserve Bank of San Francisco ( email )

101 Market Street
San Francisco, CA 94105
United States
415-974-3345 (Phone)
415-977-4084 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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