Title

Unemployment Insurance Eligibility and Wage Dispersion

Keywords

Unemployment insurance eligibility, entitlement premium, wage dispersion, wage posting

Abstract

Unemployment insurance (UI) systems only distribute benefits to workers whose prior employment spell was sufficiently long. This feature alone can generate wage dispersion in the labor market among otherwise homogenous workers and firms. In our price-posting environment, changes to the UI system have surprising consequences. For instance, more generous benefits raise the wages received by ineligible workers, but lower them for the eligible workers. Increasing the minimum spell for eligibility has the same effect, assisting the very workers currently excluded.

Document Type

Working Paper

Publication Date

2020-8

Language

English

College

Family, Home, and Social Sciences

Department

Economics

University Standing at Time of Publication

Full Professor

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