The effect of education on unemployment duration

Exploiting the variation in education induced by a reform that compelled individuals to obtain additional schooling in Turkey, and using administrative unemployment insurance (UI) records, we show that high‐educated unemployed workers, compared to their low‐educated counterparts, use unemployment benefits longer, and they are less likely to find employment before their benefit periods expire. This suggests education increases one's selectiveness over jobs. We also show benefit generosity impacts the high‐ versus low‐educated differentially. Extended benefits increase low‐educated workers' probability of finding employment more than the high‐educated. Our findings highlight the importance of considering worker attributes when designing the UI system.