Do Unemployment Insurance Benefits Improve Match Quality? Evidence from Recent U.S. Recessions

55 Pages Posted: 4 Aug 2020 Last revised: 6 May 2021

See all articles by Ammar Farooq

Ammar Farooq

Georgetown University

Adriana D. Kugler

McCourt School of Public Policy ; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; National Bureau of Economic Research (NBER)

Umberto Muratori

Georgetown University

Date Written: July 2020

Abstract

We present new evidence on the impact of more generous unemployment insurance (UI) on workers’ ability to find jobs better suited to their skills. Using Longitudinal Employer-Household Dynamics data, we find the UI extensions introduced in the U.S. improved the quality of worker-job matches. Using Current Population Survey data, we also find that longer UI benefit durations decrease the mismatch between workers’ educational attainments and the educational requirements of jobs. We find bigger effects of UI on match quality for those more likely to be liquidity constrained—women, non-whites and less-educated workers—,suggesting UI extensions improve the functioning of the labor market.

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Suggested Citation

Farooq, Ammar and Kugler, Adriana Debora and Muratori, Umberto, Do Unemployment Insurance Benefits Improve Match Quality? Evidence from Recent U.S. Recessions (July 2020). NBER Working Paper No. w27574, Available at SSRN: https://ssrn.com/abstract=3665868

Ammar Farooq (Contact Author)

Georgetown University ( email )

Washington, DC 20057
United States

Adriana Debora Kugler

McCourt School of Public Policy ( email )

3700 O ST NW
311 Old North
Washington, DC 20057
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

IZA Institute of Labor Economics ( email )

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

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Umberto Muratori

Georgetown University

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