Unemployment Insurance Monthly Benefits, Pay Frequency, and Claimants' Job Search Behavior

57 Pages Posted: 11 Dec 2023

See all articles by Guangli Zhang

Guangli Zhang

Washington University in St. Louis; Saint Louis University - Sinquefield Center for Applied Economic Research

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Abstract

This paper studies how the unemployment insurance (UI) benefit profile and payment schedule impact claimants' behaviors. The study reveals that liquidity-unconstrained claimants are less likely to exit UI in months following a high likelihood of an extra benefit check. Additionally, there is suggestive evidence that these claimants are less likely to exit UI when their benefit profiles begin with a high probability of extra benefits. Moreover, leveraging state-level policy variation in the benefit pay schedule, the paper documents that switching from a biweekly to a (smoother) weekly pay schedule induces claimants to have higher reservation wages and lower exiting hazard. This paper provides novel evidence that the timing and the monthly profiles of benefit payments are important to consider when designing social insurance policies.

Keywords: unemployment insurance, Benefit Profile, Pay Frequency, job search

Suggested Citation

Zhang, Guangli, Unemployment Insurance Monthly Benefits, Pay Frequency, and Claimants' Job Search Behavior. Available at SSRN: https://ssrn.com/abstract=4661019 or http://dx.doi.org/10.2139/ssrn.4661019

Guangli Zhang (Contact Author)

Washington University in St. Louis ( email )

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Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Saint Louis University - Sinquefield Center for Applied Economic Research ( email )

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St. Louis, MO 63103
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