The effects of unemployment insurance on postunemployment earnings

There is surprisingly little research into the effects of unemployment insurance (UI) on postunemployment wage outcomes. Moreover, the few existing studies are sufficiently varied in their approach and conclusions that experienced observers have reached very different interpretations of their implic...

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Bibliographic Details
Published in:Labour economics 2000, Vol.7 (1), p.21-53
Main Authors: Addison, John T, Blackburn, McKinley L
Format: Article
Language:English
Subjects:
Displaced workers
Unemployment insurance
Wage changes
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Summary:There is surprisingly little research into the effects of unemployment insurance (UI) on postunemployment wage outcomes. Moreover, the few existing studies are sufficiently varied in their approach and conclusions that experienced observers have reached very different interpretations of their implications. We provide new estimates of the effect of UI on subsequent earnings, using data on workers displaced in the period 1983–1990. Our objective is to provide a systematic evaluation of the approaches used in the existing literature. We find some limited evidence of a favorable impact of UI on earnings, but only when we compare recipients with nonrecipients. Even in this case, our point estimates lie well below those reported in earlier studies that pointed to beneficial UI effects.
ISSN:0927-5371
1879-1034
DOI:10.1016/S0927-5371(99)00026-3