Unemployment Insurance and Job Search Behavior

59 Pages Posted: 3 Jan 2019 Last revised: 17 Feb 2019

See all articles by Daphné Skandalis

Daphné Skandalis

Federal Reserve Banks - Federal Reserve Bank of New York

Ioana Elena Marinescu

University of Pennsylvania - School of Social Policy & Practice; National Bureau of Economic Research (NBER)

Date Written: February 15, 2019

Abstract

Why do longer unemployment benefits cause longer unemployment spells? We document the time path of search behavior for 500,000 French unemployed workers entitled to various benefit durations. Search effort and the job finding hazard increase by 60% just before benefit exhaustion and decrease symmetrically after. Target wages decrease by 0.1% every month until benefit exhaustion, then remain constant. While standard search models cannot explain the drop in search effort after benefit exhaus- tion, our results confirm that search behavior is a key determinant of unemployment duration. Overall, longer benefits delay job finding mostly by postponing a spike in search effort.

Suggested Citation

Skandalis, Daphné and Marinescu, Ioana Elena, Unemployment Insurance and Job Search Behavior (February 15, 2019). Available at SSRN: https://ssrn.com/abstract=3303367 or http://dx.doi.org/10.2139/ssrn.3303367

Daphné Skandalis (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Ioana Elena Marinescu

University of Pennsylvania - School of Social Policy & Practice ( email )

3701 Locust Walk
Philadelphia, PA 19104-6214
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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