Should Unemployment Insurance Vary with the Unemployment Rate? Theory and Evidence

• 成果类型: Article
• 署名作者: Kroft, Kory; Notowidigdo, Matthew J.
• 署名单位: University of Toronto; National Bureau of Economic Research; Northwestern University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdw009
• 发表日期: 2016
• 页码: 1092-1124
• 关键词: DURATION DEPENDENCE; import competition; search equilibrium; social insurance; great recession; job search; benefits; spells

摘要

We study how the marginal welfare gain from increasing the unemployment insurance (UI) benefit level varies over the business cycle. We do this by estimating how the moral hazard cost and the consumption smoothing benefit of UI vary with labour market conditions, which we identify using variation in the interaction of UI benefit levels with the unemployment rate within U.S. states over time. We find that the moral hazard cost is procyclical, greater when the unemployment rate is relatively low. By contrast, we do not find evidence that the consumption smoothing benefit varies with the unemployment rate. We use these empirical results to estimate the marginal welfare gain, and we find that it is modest on average, but varies positively with the unemployment rate.