Discontinuous or Kinked Response? Dynamics of Unemployment Insurance and Public Assistance under the COVID-19 Crisis

20 Pages Posted: 2 Nov 2023

See all articles by Michihito Ando

Michihito Ando

Rikkyo University

Masato Furuichi

Teikyo University

Hayato Kanayama

Waseda University - Graduate School of Economics

Date Written: October 30, 2023

Abstract

This study investigates the responsiveness of Unemployment Insurance (UI) and Public Assistance (PA) programs during the COVID-19 employment shock in Japan. Estimating "excess" UI and PA caseloads under the COVID-19 crisis, we reveal heterogeneous responses to the COVID-19 shock: UI caseloads exhibit an instantaneous and discontinuous increase and subsequent decrease, while PA caseloads show a kinked and incremental increase. These contrasting safety net responses highlight a potential delay in safety net support for workers who are not eligible for UI benefits when a large employment shock occurs.

Keywords: safety net, unemployment insurance, public assistance, COVID-19, employment shock

JEL Classification: H30, H53, I38, J65, J68

Suggested Citation

Ando, Michihito and Furuichi, Masato and Kanayama, Hayato, Discontinuous or Kinked Response? Dynamics of Unemployment Insurance and Public Assistance under the COVID-19 Crisis (October 30, 2023). Available at SSRN: https://ssrn.com/abstract=4617281 or http://dx.doi.org/10.2139/ssrn.4617281

Michihito Ando (Contact Author)

Rikkyo University ( email )

3-34-1 Nishi-Ikebukuro
Toshima-ku, Tokyo 171-8501
Japan

HOME PAGE: http://https://sites.google.com/site/michihito7ando/

Masato Furuichi

Teikyo University

Hachiojishi, Tokyo, 192-0395
Japan

Hayato Kanayama

Waseda University - Graduate School of Economics ( email )

1-6-1 Nishi-waseda, Shinjuku-ku
Tokyo
Japan

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