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We investigate the labor market effects of a loan guarantee program targeting French SMEs during the financial crisis. Exploiting differences in regional treatment intensity in a border discontinuity design, we uncover a central trade-off for such interventions. While the program has a positive impact on workers' employment and earnings trajectories that translates into positive aggregate employment effects, it dampens the worker reallocation toward more productive firms that happens following recessions, and particularly so for high-skill workers. This labor allocation effect is economically significant and translates into a reduction in aggregate productivity. [ABSTRACT FROM AUTHOR]

We examine the relationship between unemployment insurance generosity and reported intimate partner violence in the U.S. by leveraging the staggered adoption of the Federal Pandemic Unemployment Compensation program, which increased unemployment insurance payments by $600 per week in 2020. Using detailed nationwide police report data, we find that states that implemented this program reported 9% more cases of intimate partner violence (IPV) than states which had not yet implemented the program, driven primarily by increases in aggravated assault, intimidation, and sexual assault. This is consistent with prior evidence on changes in government transfers and IPV. These results are not explained by local differences in unemployment, sheltering in place, economic impact payments, COVID-19 case rates, or temperature. We also find a decrease in total reported IPV against men, but more serious offenses increase. [ABSTRACT FROM AUTHOR]

This paper examines a new element of the Tiebout process, which is whether Tiebout mobility impacts the organization of residents and firms within a single metropolitan area. Unemployment insurance (UI) is a state-wide policy. We therefore examine whether variation in UI policy outcomes causes firms and residents to alter their locations within the local urban economy. Our empirical process is to use a matching pairs regression discontinuity design based on the nine largest cities where state boundaries cross the metropolitan area. We find that Tiebout mobility results from the UI wage replacement rate, the UI eligibility rate, and UI taxes. [ABSTRACT FROM AUTHOR]

The authors investigate reasons unemployment insurance (UI) claims have declined dramatically over the past 3 decades. The fall is concerning because it suggests a reduced countercyclical effectiveness of the UI program. Additionally, weekly initial UI claims are an important leading indicator of aggregate economic activity, so their meaning has changed. The authors identify the main factors that changed with the decline in claims. Their procedure suggests what the level of claims would have been later in the period, had values of variables or parameters of the system been at levels observed earlier in the period. The analysis of state-year data suggests that the decline in UI claims stems largely from changes in the industrial and occupational mix of employment interacting with changes in UI program features set by individual states. This decline could be offset by federal rules for states to improve benefit access, replacement rates, and potential UI durations. [ABSTRACT FROM AUTHOR]

Are preferences for labour regulations driven by individuals' own endowments or their beliefs? To address this question, we conducted a cross-country survey on people's opinions on employment protection legislation – an area where reform has proven to be difficult and personal interests is at stake. We find that individuals' beliefs contribute two to three times more than their own endowments and personal pay-offs. A randomized information treatment confirms that beliefs can explain views about regulations, but beliefs can also change with new information. Our results are robust to several checks, including to alternative estimation techniques and samples. [ABSTRACT FROM AUTHOR]

This special issue originates from a dual submission conference with the NBER Insurance Working Group and the Corporate Finance Program in 2020. It brings a broader perspective on important frictions in insurance markets, including trust between insurers and policyholders, conflicts of interest among brokers, suboptimal policyholder behavior, and risk-based capital regulation. Several developments in the economy and the academic literature have provided an impetus for new perspectives, including the growth of savings products with minimum return guarantees, the global financial crisis, and intermediary asset pricing. We conclude with an overview of research questions that are promising for further exploration. [ABSTRACT FROM AUTHOR]

We document that a more generous unemployment insurance (UI) system shifts labor supply from safer to riskier firms and reduces the compensating wage differentials that risky firms need to pay. Consequently, a more generous UI system increases risky firms' value and fosters entrepreneurship by reducing new firms' labor costs. Exploiting a UI reform in Brazil that affects only part of the workforce allows us to compare labor supply for workers with different degrees of UI protection within the same firm, sharpening the identification of the results. Altogether, our results suggest that UI provides a transfer system from safe to risky firms. [ABSTRACT FROM AUTHOR]

While recessions typically affect men's employment more adversely than women's in the USA, the COVID-19 recession was an exception to this trend. In this paper, we focus on the veteran population and ask whether COVID-19 affected employment outcomes differently for veteran women than veteran men. Using Current Population Survey data, we find that the COVID-19 recession had less serious effects on veteran women relative to veteran men in multiple aspects of employment conditions. We offer potential explanations for this finding and ultimately provide evidence of heterogeneity in labor market experiences based on types of recessions, gender, and population subgroups. [ABSTRACT FROM AUTHOR]

This paper examines the labour market and health effects of a non-contributory long-term unemployment (LTU) benefit targeted at middle-aged disadvantaged workers. To do so, we exploit a Spanish reform introduced in July 2012 that increased the age eligibility threshold to receive the benefit from 52 to 55. Our results show that men who were eligible for the benefit experience a reduction in injury hospitalisations by 12.9% as well as a 2 percentage points drop in the probability of a mental health diagnosis. None of the results are significant for women. We document two factors that explain the gender differences: the labour market impact of the reform is stronger for men, and eligible men are concentrated in more physically demanding sectors, like construction. Importantly, we also find evidence of a program substitution effect between LTU and partial disability benefits. Our results highlight the role of long-term unemployment benefits as a protecting device for the (physical and mental) health of middle-aged, low-educated workers who are in a disadvantaged position in the labour market. [ABSTRACT FROM AUTHOR]

In the present paper, we first establish a version of the abstract lower and upper-solution method for our class of operators. In this sense, we investigated the main objective of this paper, that is, the existence of a positive solution for a new class of fractional systems of the Kirchhoff type with ψ -Hilfer operators via the method of sub and supersolutions in ψ -fractional space H p α , β ; ψ (Ω) . [ABSTRACT FROM AUTHOR]

This article characterizes the relation between the equilibrium unemployment insurance replacement rate and the frequency of its political choice. We first use a tractable analytical model to show how insurance, incentive, and redistribution effects interact at the equilibrium. We then examine a fully repeated choices equilibrium in a quantitative heterogeneous agents model and show that unemployment persistence, whether a policy is announced first or not, and the type of the political process are key determinants of the relation between the equilibrium replacement rate and the frequency of its choice. In a utilitarian welfare context, we find that the equilibrium replacement rate is higher if the policy is chosen more frequently but this relation is reversed in a median voter context. [ABSTRACT FROM AUTHOR]

Purpose: Following the COVID-19 outbreak, there are concerns whether economies are becoming farther from equality and competency. While this matters to every economy, it is more crucial for developing ones who already suffer from income inequalities and lack of competency. The purpose of this paper is to address this issue. Design/methodology/approach: This study uses an administrative data from the Iran's Social Security Organization (ISSO) that provides insurance to workers entitled to the Labor Law of Iran. The data contain more than 7,000,000 workers. The authors assess heterogeneous impact of the first wave of the pandemic by firms' size and average payment. Findings: The authors' estimation results indicate that, following the initiation of the pandemic, the workers whose corresponding firms are smaller, overall, are more prone to the pandemic and are more likely to submit a request for unemployment benefits. However, the relation is neither homogeneous across sectors nor linear among micro-sized firms. Few sectors indicate a positive relationship between size and likelihood of request submission, including cultural activity, shoemaking and clothing sectors. Besides the size, the authors investigate whether pay grades could explain the probability of becoming unemployed after the pandemic. Results show that workers whose corresponding firms pay less are more likely to submit a request. This is robust within different sectors. Research limitations/implications: The ISSO dataset is not a panel, so the authors cannot employ methods of causal inferences. The authors' results should be seen as correlation; however, due to exogeneity and sharpness of the pandemic the result infers to some degree of causality. The data does not cover the informal sector, so the estimates are at lower boundary. Originality/value: Administrative data on unemployment benefits during COVID-19 show that the pandemic interferes with competition by forcing low-paid workers and small firms to exit the market. This is an alarm for the competition in every economy, specially developing ones. [ABSTRACT FROM AUTHOR]

This paper examines how changes in household-level risk sharing affect the marriage market. We use as our laboratory a German unemployment insurance (UI) reform that tightened means-testing based on the partner's income. The reduced generosity of UI increased the demand for household-level risk sharing, which lowered the attractiveness of individuals exposed to unemployment risk. Because unemployment risk correlates with non-German nationality, our main finding is that the UI reform led to a decrease in intermarriage. The 2004 expansion of the European Union had a comparable effect on intermarriage for the affected nationalities. Both reforms increased marital stability, which is consistent with better selection by couples. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic triggered a large and immediate drop in employment among U.S. workers, along with major expansions of unemployment insurance (UI) and work from home. We use Current Population Survey and Social Security application data to study employment among older adults and their participation in disability and retirement insurance programs through the second year of the pandemic. We find ongoing improvements in employment outcomes among older workers in the labor force, along with sustained higher levels in the share no longer in the labor force during this period. Applications for Social Security disability benefits remain depressed, particularly for Supplemental Security Income. In models accounting for the expiration of expanded UI, we find some evidence that the loss of these additional financial supports resulted in an increase in disability claiming. Social Security retirement benefit claiming is approximately 3% higher during the second year of the pandemic. [ABSTRACT FROM AUTHOR]

Copyright of Sozialer Fortschritt is the property of Duncker & Humblot GmbH and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Most studies on benefit sanctions within the German welfare system rely on established datasets about welfare receipt. This paper analyzes how using a dataset from the operational system of the German Federal Employment Agency for processing welfare claims can contribute to further research on benefit sanctions. For this purpose, I use a random sample of welfare recipients with at least one sanction between 2016 and 2018. First, this allows the detailed analysis of time lags between different steps in the sanction process. Second, linking this dataset with established datasets allows the identification of imposed sanctions for which sanction periods could not be (fully) implemented. This is largely explained by individuals leaving the welfare system between sanction events and sanction periods, e.g., by taking up employment. Third, the paper shows differences in benefit cuts across subgroups. This opens up paths for future research. [ABSTRACT FROM AUTHOR]

Short-time work (STW) policies provide subsidies for hour reductions to workers in firms experiencing temporary shocks. They are the main policy tool used to support labour hoarding during downturns and were aggressively used during the coronavirus disease 2019 (COVID-19) pandemic. Yet, very little is known about their employment and welfare consequences. This article leverages unique administrative social security data from Italy and quasi-experimental variation in STW policy rules to offer evidence on the effects of STW on firms' and workers' outcomes during the Great Recession. Our results show large and significant negative effects of STW treatment on hours, but large and positive effects on headcount employment. We then analyse whether these positive employment effects are welfare enhancing, distinguishing between temporary and more persistent shocks. We first provide evidence that liquidity constraints and rigidities in wages and hours may make labour hoarding inefficiently low without STW. Then, we show that adverse selection of low productivity firms into STW reduces the long-run insurance value of the program and creates significant negative reallocation effects when the shock is persistent. [ABSTRACT FROM AUTHOR]

We analyse how habit formation affects collective bargaining outcomes if a firm-specific trade union determines wages. For a wide variety of alternative analytical settings, such internal reference points induce the union to increase wages over time. A numerical example suggests that the resulting decline in employment can be substantial. Furthermore, policy changes in one period, which are either reversed in the next or anticipated in previous periods, have effects on wage outcomes for multiple periods because they affect the habit stock at times at which they are not yet or no longer in operation. [ABSTRACT FROM AUTHOR]

Copyright of Sozialer Fortschritt is the property of Duncker & Humblot GmbH and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper presents an average treatment effect analysis of Spain's furlough program during the onset of the COVID-19 pandemic. Using 2020 labour force quarterly microdata, we construct a counterfactual made of comparable nonfurloughed individuals who lost their jobs and apply propensity score matching based on their pretreatment characteristics. Our findings show that the probability of being re-employed in the next quarter significantly increased for the treated (furlough granted group). These results appear robust across models, after testing a wide range of matching specifications that reveal a reemployment probability premium of near 30 percentage points in the group of workers who had been furloughed for a single quarter. Nevertheless, a different time arrangement affected the magnitude of the effect, suggesting that it may decrease with the furlough duration. Thus, an analogous analysis for a longer (two quarter) scheme estimated a still positive but smaller effect, approximately 12 percentage points. Although this finding might alert against long lasting schemes under persistent recessions, this policy still stands as a useful strategy to face essentially transitory adverse shocks. Highlights: We present a novel contribution that assesses the causal effects of furlough programs using updated microdata from the pandemic period in Spain. We found key evidence of a robust and positive average effect (approx. 30 percentage points) of furlough schemes on the probability of being re-employed in the short run. However, this positive effect was time-dependent and lessened when the furlough scheme was extended for two consecutive quarters (down to 12 percentage points). This result suggests effectiveness losses with time and advises against long-lasting schemes. [ABSTRACT FROM AUTHOR]

Using an event study approach and a novel data set that links administrative information on German establishments with exact distance measures from geo-referenced address data, we analyze the net impact of mass layoffs on local employment. We find that local spillovers significantly attenuate the direct impact of mass layoffs on municipal-level employment. About a quarter of the 1-year direct employment loss due to a mass layoff event is absorbed within the same municipality. Local spillovers are especially pronounced very close to the mass layoff site; the majority of the absorption is concentrated within a 1000-m radius. There is little evidence of spillovers beyond the affected municipality. [ABSTRACT FROM AUTHOR]

We compute participation tax rates across the EU and find that work disincentives inherent in tax–benefit systems largely depend on household composition and the individual's earner role within the household. We then estimate participation elasticities using an IV group estimator that enables us to investigate the responsiveness of individuals to work incentives. We contribute to the literature on heterogeneous elasticities by providing estimates for breadwinners and secondary earners separately, according to their potential earnings. Our results show an average participation elasticity of 0.0–0.1 among breadwinners and 0.1–0.4 among secondary earners in the EU as well as a high degree of heterogeneity across countries. [ABSTRACT FROM AUTHOR]

Following the covid-induced lockdowns, many commented on the role the German model of Kurzarbeit could play in reducing unemployment. Other countries emulated the model. Looking at the experiences of Germany, the UK, Sweden and the USA, the article analyses the strengths and weaknesses of short-time working (STW) schemes. It asks whether STW has been well designed to have optimal short and longer run impact. It is quite effective as a short-term palliative, but in longer downturns, its weaknesses come to the fore. It is by no means clear that the UK needs a permanent replacement for the furlough. [ABSTRACT FROM AUTHOR]

The Unemployment Insurance (UI) system in the United States has played a decisive lifeline role in effectively mitigating the economic and social impact of the Covid-19 pandemic, which prompted the largest expansion of UI programs in history, one that is unprecedented in scope, scale and cost. However, the crisis has once again exposed some well-known challenges of the program, perhaps best epitomized by the steady decline since the 1980s of both the recipiency rate and the wage replacement rate, which is partly related to the UI system's funding structure. As a result, on the eve of the pandemic less than one in three unemployed workers used to collect UI benefits – of lower amounts and often for shorter periods of time than before – despite that the average duration of unemployment had almost doubled in the aftermath of the Great Recession. The pandemic has also laid bare additional shortcomings – most notably in the effectiveness of the UI delivery infrastructure to provide timely and accurate payments – which have prompted further calls for modernizing the UI system. The objective of this paper is threefold: first, after a brief description of the main structural characteristics of the UI system, it compares the role played by UI in mitigating the impact of the 2008–09 Great Recession and the 2020 Covid-19 pandemic; second, it reviews the empirical evidence from the pandemic on potential demand-side (countercyclical stabilization) and supply-side (job-search disincentives) effects of emergency extensions of UI programs. Finally, it discusses the main lessons that the expansion of UI programs to respond to the pandemic can offer to inform – and enrich – the debate on whether and how to reform the UI system. The experience with the UI system provides fundamental lessons that can usefully inform the debate on whether and how to introduce – for example in Europe – a common unemployment insurance scheme for macroeconomic stabilization.

Short-time work (STW) in Germany allows for a lot of flexibility in actual usage. Ex ante, firms notify the Employment Agency about the total number of employees eligible, and, up to the total granted, firms can flexibly choose how many employees actually use STW. In firm-level surveys, which provide timely information on STW in Germany, over-reporting of the number of employees on STW is prevalent. This study explores reasons for STW over-reporting based on a high-frequency and low-cost survey initiated during the Covid-19-pandemic (BeCovid) and a low-frequency and high-cost long-running survey (BP). Merging administrative records on actual use of STW, firms that use STW prove more likely to participate in the BeCovid survey. Multi-establishment firms over-report STW because they tend to report STW for all subfirms. The BP uses more interview time and confirms the over-reporting of STW use in the survey month, while—crucially—the over-reporting drops sharply with a few months of retrospection. [ABSTRACT FROM AUTHOR]

We build a small open economy business cycle model with search and matching frictions to assess the impact of labor market policies on the dynamics of employment and other macroeconomic variables in emerging economies. The model features an endogenous selection mechanism by which inefficient jobs are destroyed in recessions, thus linking labor market dynamics and aggregate productivity. In a quantitative version of the model calibrated to the Mexican economy, we find that reducing labor taxes and increasing firing costs would have mitigated the fall in employment during the Great Recession of 2008–2009. However, by preventing firms from dismissing low-productive workers, higher firing costs would have impaired this selection mechanism, thus generating a larger fall in TFP and delaying the recovery. Cutting labor taxes, in contrast, have minor effects on productivity by mainly affecting hiring decisions. An extension of the model shows that lowering labor taxes provides an additional productivity boost by expanding formal hirings and reducing the informality rate. [ABSTRACT FROM AUTHOR]

While the dissolution of new ventures is a common phenomenon in the organizational landscape, it seldom means the end of the road for those involved in the new venture. Nevertheless, most research treats this dissolution with a sense of finality. Using the Danish Integrated Database for Labor Market Research (IDA), we explore the persistence of cofounders and early employees to continue their work relationships after the dissolution of the new venture. We investigate where these team members continue their career and whether they pursue entrepreneurship together in another new venture. Overall, over 18.3% move jointly, and comobility is more prevalent among new venture team members who worked jointly prior to founding the new venture and among those new venture teams demonstrating high levels of homogeneity. Moreover, comovers tend toward small firms, and comobility occurs largely in similar industry. A large share of comovers move to new ventures, which is indicative of serial or habitual new venture teams. This also raises further question on team-level dimension of learning from failure. Plain English Summary: There is lots of empirical research that investigates the emergence and growth of team-based new ventures. But what happens with these new venture teams when the business they established closes? Do these teams outlive the startup itself? In this study, we investigate this topic in detail by following the career trajectories of new venture team (NVT) members. Based on a sample of 2400 team-based Danish startups, we find that 18% of NVT members continue their collaboration. The results demonstrate that similarity between NVT members, the extent that they are engaged in knowledge intensive work, and prior joint work experience are drivers of such comobility. Also, we find that NVT comobility often means re-entering into entrepreneurship. The fact that such comobility is common and that many re-enter into entrepreneurship means that our study has implications for both research and practice. More specifically on how learning from failure takes place in the setting of NVT teams. [ABSTRACT FROM AUTHOR]

This paper studies how job displacement influences the health of the worker's spouse. Results show that the husband's displacement leads to an increase in the probability of the wife reporting her physical health as fair/poor. These wives are also more likely to experience high blood pressure, heart disease, and/or emotional issues. Wives who are in poor health at baseline, are in low financial standing prior to the husbands' job loss, are not working two years before the husbands' job loss, and have children at home at the time of the husbands' displacement tend to drive these results. Husbands of displaced wives experience little change in self-reported health, the probability of high blood pressure, heart disease, or emotional issues. [ABSTRACT FROM AUTHOR]

This paper analyses the relationship between a husband's job loss and marital stability, focusing on involuntary employment terminations due to plant closures or dismissals. Using discrete survival analysis techniques on data from the German Socio-Economic Panel, we find plant closures and dismissals to be associated with a 54 and 74% higher risk of marital dissolution respectively, though the strength of association varies significantly by how long ago the change in employment status occurred. We extend the previous literature by considering heterogeneity in the relationship depending on whether new employment was found. Our analysis shows that the dissolution risk remains elevated even in couples where the husband has taken up a new position. Surprisingly, the relative risk of dissolution following the first period in a new job after a job loss is about the same as the relative risk of dissolution following the first period without employment. The relationship between finding a new job and marital dissolution appears to be mediated by changes in working hours as well as wages. In two extensions, we also consider the role of the wife's employment status in moderating the relationship and show that a wife's job loss is not associated with a similar increase in the probability of divorce as a husband's. [ABSTRACT FROM AUTHOR]

We evaluate the sources of wage losses of workers displaced due to firm closure by comparison of workers' wages before and after displacement. We decompose the sources of the wage losses into the contribution of firm, match quality, and job title fixed effects. Sorting into lower paying job titles represents the largest component of the monthly wage loss of displaced workers, accounting for 37 percent of the total average monthly wage loss compared to 31 percent for the firm and 32 percent for the match effects. With respect to the hourly wage losses, job title effects account for 46 percent of the total loss, while firm and match effects contribute in equal shares representing each 27 percent of the loss. [ABSTRACT FROM AUTHOR]

Three features of real‐life reforms of dual employment protection legislation (EPL) systems are particularly hard to study through the lens of standard labor‐market search models: (i) the excess job turnover implied by dual EPL, (ii) the nonretroactive nature of EPL reforms, and (iii) the transition dynamics from dual to a unified EPL system. In this paper, we develop a computationally tractable model addressing these issues. Our main finding is that the welfare gains of reforming a dual EPL system are sizeable and achieved mostly through a decrease in turnover at short job tenures. This conclusion continues to hold in more general settings featuring wage rigidities, heterogeneity in productivity upon matching, and human capital accumulation. We also find substantial cross‐sectional heterogeneity in welfare effects along the transition to a unified EPL scheme. Given that the model is calibrated to data from Spain, often considered as the epitome of a labor market with dual EPL, our results should provide guidance for a wide range of reforms of dual EPL systems. [ABSTRACT FROM AUTHOR]

This paper studies the intergenerational impact of parental job loss on school performance during the Great Recession in Spain. Collecting data through parental surveys in a school in the province of Barcelona, I obtain information about the parental labour market status before and after the Great Recession. I can then link this information to repeated information on their children's school performance, for a sample of over 300 students. Using individual fixed effects, the estimates show a negative and significant decrease on average grades of around 15% of a standard deviation after father's job loss. These results are mainly driven by those students whose fathers suffer long unemployment spells. In contrast, the average impact of mother's job loss on school performance is close to zero and non-significant. The decline in school performance during the Great Recession after father's job loss, particularly among disadvantaged students, could result in detrimental long-term effects that might contribute to increased inequality. This could be an important and underemphasised cost of recessions. [ABSTRACT FROM AUTHOR]

We study how a reduction in potential benefit duration (PBD) affects employment and earnings of job seekers before and after unemployment benefits exhaust. Reducing PBD induces job seekers to become less selective and accept jobs earlier, which can worsen or improve labor market outcomes. We study a 2003 reform that reduces PBD from 24 to 18 months for job seekers younger than 55 years in Switzerland. Using older job seekers as a control group, we find that reducing PBD increases employment and earnings even after unemployment benefits have run out. Employment and earnings increase particularly strongly for job seekers who previously worked in industries with high R&D expenditures, industries where job seekers' skills can depreciate rapidly. [ABSTRACT FROM AUTHOR]

The key assumption in regression discontinuity analysis is that the distribution of potential outcomes varies smoothly with the running variable around the cutoff. In many empirical contexts, however, this assumption is not credible; and the running variable is said to be manipulated in this case. In this paper, we show that while causal effects are not point identified under manipulation, one can derive sharp bounds under a general model that covers a wide range of empirical patterns. The extent of manipulation, which determines the width of the bounds, is inferred from the data in our setup. Our approach therefore does not require making a binary decision regarding whether manipulation occurs or not, and can be used to deliver manipulation‐robust inference in settings where manipulation is conceivable, but not obvious from the data. We use our methods to study the disincentive effect of unemployment insurance on (formal) reemployment in Brazil, and show that our bounds remain informative, despite the fact that manipulation has a sizable effect on our estimates of causal parameters. [ABSTRACT FROM AUTHOR]

In this paper, we investigate the causes and consequences of "unclaimed" unemployment insurance (UI) benefits. A search model is developed where the costs to collecting UI benefits include both a traditional "fixed" administrative cost and an endogenous cost arising from worker and firm interactions. Experience rated taxes give firms an incentive to challenge a worker's UI claim, and these challenges are costly for the worker. Exploiting data on improper denials of UI benefits across states in the U.S. system, a two‐way fixed effects analysis shows a statistically significant negative relationship between the improper denials and the UI take‐up rate, providing empirical support for our model. We calibrate the model to elasticities implied by the two‐way fixed effects regression to quantify the relative size of these UI collection costs. The results imply that on average the costs associated with firm challenges of UI claims account for 41% of the total costs of collecting, with improper denials accounting for 8% of the total cost. The endogenous collection costs imply the unemployment rate responds much slower to changes in UI benefits relative to a model with fixed collection costs. Finally, removing all eligibility requirements and allowing workers to collect UI benefits without cost shows these costs to be 4.5% of expected output net of vacancy costs. Moreover, this change has minimal impact on the unemployment rate. [ABSTRACT FROM AUTHOR]

We use administrative data to examine the effect of a 50 percent benefit cut for young unemployed claimants in Ireland during the Great Recession. Because the cut applied only to new spells, claimants whose unemployment start dates differed by one day received very different benefits; we exploit this feature in a regression discontinuity analysis. We find that the benefit cut significantly reduced unemployment duration, with exits to training and work accounting for the majority of this effect. [ABSTRACT FROM AUTHOR]