Does Extending Unemployment Benefits Improve Job Quality?

Arbeitspapier

Contrary to standard search model predictions, prior studies failed to estimate a positive effect of unemployment insurance (UI) on reemployment wages. This paper estimates a positive UI wage effect exploiting an age-based regression discontinuity in Austrian administrative data. A search model incorporating duration dependence determines the UI wage effect as the balance between two offsetting forces: UI causes agents to seek higher-wage jobs, but also reduces wages by lengthening unemployment. This implies a negative relationship between the UI unemployment-duration and wage effects, which holds empirically both in our sample and across studies, reconciling disparate wage-effect estimates. Empirically, UI raises wages by improving reemployment firms’ quality and attenuating wage drops.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: NRN Working Paper, NRN: The Austrian Center for Labor Economics and the Analysis of the Welfare State ; No. 1404

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Nekoei, Arash ; Weber, Andrea
• Event: Veröffentlichung
• (who): Johannes Kepler University Linz, NRN - The Austrian Center for Labor Economics and the Analysis of the Welfare State
• (where): Linz
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/115109
• Last update: 10.03.2025, 11:43 AM CET