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

40 Pages Posted: 16 Dec 2019

See all articles by Fatih Karahan

Fatih Karahan

Federal Reserve Bank of New York

Kurt Mitman

IIES

Brendan Moore

Federal Reserve Banks - Federal Reserve Bank of New York

Multiple version iconThere are 3 versions of this paper

Date Written: December 2019

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 percent of the total effect.

Keywords: unemployment insurance, unemployment, vacancies, search

JEL Classification: E24, J63, J64, J65

Suggested Citation

Karahan, Fatih and Mitman, Kurt and Moore, Brendan, Individual and Market-Level Effects of UI Policies: Evidence from Missouri (December 2019). FRB of New York Staff Report No. 905, Available at SSRN: https://ssrn.com/abstract=3503566 or http://dx.doi.org/10.2139/ssrn.3503566

Fatih Karahan (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Kurt Mitman

IIES ( email )

Stockholm, SE-10691
Sweden

HOME PAGE: http://kurtmitman.com

Brendan Moore

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

33 Liberty Street
New York, NY 10045
United States

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