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Assessing the welfare effects of unemployment benefits using the regression kink design

Landais, Camille ORCID: 0000-0002-9534-680X (2015) Assessing the welfare effects of unemployment benefits using the regression kink design. American Economic Journal: Economic Policy, 7 (4). pp. 243-278. ISSN 1945-7731

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Identification Number: 10.1257/pol.20130248


I show how, in the tradition of the dynamic labor supply literature, one can identify the moral hazard effects and liquidity effects of unemployment insurance (UI ) using variations along the time profile of unemployment benefits. I use this strategy to investigate the anatomy of labor supply responses to UI. I identify the effect of benefit level and potential duration in the regression kink design using kinks in the schedule of benefits in the US. My results suggest that the response of search effort to UI benefits is driven as much by liquidity effects as by moral hazard effects.

Item Type: Article
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Additional Information: © 2015 American Economic Association
Divisions: Economics
Subjects: H Social Sciences > HV Social pathology. Social and public welfare. Criminology
JEL classification: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information
J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J22 - Time Allocation and Labor Supply
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J65 - Unemployment Insurance; Severance Pay; Plant Closings
Date Deposited: 01 Dec 2015 15:56
Last Modified: 19 Jun 2024 16:03

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