Unemployment benefits and unemployment in the great recession: The role of macro effects

Arbeitspapier

We exploit a policy discontinuity at U.S. state borders to identify the effects of unemployment insurance policies on unemployment. Our estimates imply that most of the persistent increase in unemployment during the Great Recession can be accounted for by the unprecedented extensions of unemployment benefit eligibility. In contrast to the existing recent literature that mainly focused on estimating the effects of benefit duration on job search and acceptance strategies of the unemployed - the micro effect - we focus on measuring the general equilibrium macro effect that operates primarily through the response of job creation to unemployment benefit extensions. We find that it is the latter effect that is very important quantitatively.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Staff Report ; No. 646

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Labor Turnover; Vacancies; Layoffs ; Unemployment: Models, Duration, Incidence, and Job Search ; Unemployment Insurance; Severance Pay; Plant Closings
• Subject: unemployment insurance ; unemployment ; employment ; vacancies ; wages ; search ; matching ; Arbeitslosenversicherung ; Arbeitslosigkeit ; Beschäftigungseffekt ; Konjunktur ; Wirtschaftskrise ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hagedorn, Marcus ; Karahan, Fatih ; Manovskii, Iourii ; Mitman, Kurt
• Event: Veröffentlichung
• (who): Federal Reserve Bank of New York
• (where): New York, NY
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/93584
• Last update: 10.03.2025, 11:43 AM CET