Reemployment wages and UI liquidity effect: a regression discontinuity approach

Abstract

Unemployment insurance, Subsidized unemployment duration, Reemployment wages, Liquidity effect, Regression discontinuity, J38, J64, J65, J68,

Estimating the Effects of Potential Benefit Duration Without Variation in the Maximum Duration of Unemployment Benefits

“…This nding is in line with the studies by Centeno and Novo (2009) and Nekoei and Weber (2017), which nd small positive eects on re-employment wages in Portugal and Austria, respectively. On the other hand, most other studies, such as Lalive (2007) and Card et al (2007) for Austria, Le Barbanchon (2016) for France, and Schmieder et al (2016) for Germany, nd negative or no eects of longer benet duration on match quality.…”

The Causal Effect of Unemployment Duration on Wages: Evidence from Unemployment Insurance Extensions

“…Vodopivec (2008) and Centeno and Novo (2009) find negative effects of similar magnitude of UI extensions. As further discussed in Section 5, an additional value added with respect to these papers is that we provide a framework and dynamic results that allow us to separate the wage offer and the reservation wage effect.…”

The Effect of Unemployment Benefits and Nonemployment Durations on Wages

“…, Meyer 1990;Rothstein 2011;Kroft and Notowidigdo 2015;Schmieder, von Wachter, and Bender 2012a, b;Farber and Valletta 2013), fewer papers have studied the effect of UI extensions on reemployment wages. Recent studies find that UI extensions have small effects on reemployment wages with typically negative point estimates (e.g., Lalive 2007;Card, Chetty, and Weber 2007;Centeno and Novo 2009). In this paper we show that these estimates represent the sum of several potentially offsetting components: Firstly, UI extensions increase the outside option of workers and thus may push up equilibrium wages of individuals who find jobs (either due to an increase in reservation wages or a stronger bargaining position).…”

“…The current literature has found mixed results regarding the effects on wages and other job outcomes. More recent studies by Lalive (2007) ;Card, Chetty, and Weber (2007); and Centeno and Novo (2009) used regression discontinuity designs to more clearly identify the effects and find negative impacts on wages. While these results are relatively imprecisely estimated and hence not statistically significantly different from zero, confidence intervals contain possible negative and positive values that are economically meaningful.…”