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Unemployment Benefits and the Timing of Redundancies

Author

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  • Laura Khoury

    (Norwegian School of Economics and Business Administration - Norwegian School of Economics and Business Administration)

Abstract
The literature on unemployment insurance (UI) has primarily focused on its im-pact on unemployment outflows. Using administrative data and a discontinuity inUI benefits at a tenure threshold, I show that inflows also respond to the extentof UI. Based on bunching estimates, the elasticity of the employment duration toUI benefits is estimated to be 0.014, implying that 10% of layoffs in an 8-weekwindow before the threshold are delayed. Examining the mechanisms, the evidencesuggests that employers and employees bargain over contract termination. Takentogether, employers and employees show sophisticated reactions to UI with effectson employment duration.

Suggested Citation

  • Laura Khoury, 2021. "Unemployment Benefits and the Timing of Redundancies," Working Papers halshs-02057145, HAL.
    • Handle: RePEc:hal:wpaper:halshs-02057145
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02057145v2
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    References listed on IDEAS

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    Cited by:

    1. Giulia Giupponi & Camille Landais & Alice Lapeyre, 2022. "Should We Insure Workers or Jobs during Recessions?," Journal of Economic Perspectives, American Economic Association, vol. 36(2), pages 29-54, Spring.
    2. Albanese, Andrea & Picchio, Matteo & Ghirelli, Corinna, 2020. "Timed to Say Goodbye: Does Unemployment Benefit Eligibility Affect Worker Layoffs?," Labour Economics, Elsevier, vol. 65(C).

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    More about this item

    Keywords

    Bunching; Unemployment insurance; Behavioral responses; Bargaining;
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