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Should unemployment insurance cover partial unemployment?

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  • Susanne Ek Spector

    (Nordea Markets, Sweden, and IZA, Germany)

Abstract

A considerable share of the labor force consists of underemployed part-time workers: employed workers who, for various reasons, are unable to work as much as they would like to. Offering unemployment benefits to part-time unemployed workers is controversial. On the one hand, such benefits can strengthen incentives to take a part-time job rather than remain fully unemployed, thus raising the probability of obtaining at least some employment. On the other hand, these benefits weaken incentives for part-time workers to look for full-time employment. It is also difficult to distinguish people who work part-time by choice from those who do so involuntarily.

Suggested Citation

  • Susanne Ek Spector, 2022. "Should unemployment insurance cover partial unemployment?," IZA World of Labor, Institute of Labor Economics (IZA), pages 199-199, June.
    • Handle: RePEc:iza:izawol:journl:2022:n:199
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    References listed on IDEAS

    as
    1. Susanne Ek & Bertil Holmlund, 2015. "Part-time unemployment and optimal unemployment insurance," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(2), pages 201-223, April.
    2. David S. Lee & Pauline Leung & Christopher J. O’Leary & Zhuan Pei & Simon Quach, 2021. "Are Sufficient Statistics Necessary? Nonparametric Measurement of Deadweight Loss from Unemployment Insurance," Journal of Labor Economics, University of Chicago Press, vol. 39(S2), pages 455-506.
    3. Kyyrä, Tomi, 2010. "Partial unemployment insurance benefits and the transition rate to regular work," European Economic Review, Elsevier, vol. 54(7), pages 911-930, October.
    4. Kyyrä, Tomi & Parrotta, Pierpaolo & Rosholm, Michael, 2013. "The effect of receiving supplementary UI benefits on unemployment duration," Labour Economics, Elsevier, vol. 21(C), pages 122-133.
    5. Annette Walling & Gareth Clancy, 2010. "Underemployment in the UK labour market," Economic & Labour Market Review, Palgrave Macmillan;Office for National Statistics, vol. 4(2), pages 16-24, February.
    6. Raymond Munts, 1970. "Partial Benefit Schedules in Unemployment Insurance: Their Effect on Work Incentive," Journal of Human Resources, University of Wisconsin Press, vol. 5(2), pages 160-176.
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    8. Arlene Holen & Stanley Horowitz, 1974. "Partial Unemployment Insurance Benefits and the Extent of Partial Unemployment," Journal of Human Resources, University of Wisconsin Press, vol. 9(3), pages 420-422.
    9. Cockx, Bart & Robin, Stéphane R. & Goebel, Christian, 2006. "Income Support Policies for Part-Time Workers: A Stepping-Stone to Regular Jobs? An Application to Young Long-Term Unemployed Women in Belgium," IZA Discussion Papers 2432, Institute of Labor Economics (IZA).
    10. Hélène Benghalem & Pierre Cahuc & Pierre Villedieu, 2021. "The Lock-In Effects of Part-Time Unemployment Benefits," Working Papers hal-03389159, HAL.
    11. Anna Godøy & Knut Røed, 2016. "Unemployment Insurance and Underemployment," LABOUR, CEIS, vol. 30(2), pages 158-179, June.
    12. McCall, Brian P, 1996. "Unemployment Insurance Rules, Joblessness, and Part-Time Work," Econometrica, Econometric Society, vol. 64(3), pages 647-682, May.
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    15. Benghalem, Helène & Cahuc, Pierre & Villedieu, Pierre, 2021. "The Lock-in Effects of Part-Time Unemployment Benefits," IZA Discussion Papers 14189, Institute of Labor Economics (IZA).
    16. Auray, Stéphane & Lepage-Saucier, Nicolas, 2021. "Stepping-stone effect of atypical jobs: Could the least employable reap the most benefits?," Labour Economics, Elsevier, vol. 68(C).
    17. Caliendo, Marco & Künn, Steffen & Uhlendorff, Arne, 2016. "Earnings exemptions for unemployed workers: The relationship between marginal employment, unemployment duration and job quality," Labour Economics, Elsevier, vol. 42(C), pages 177-193.
    18. Hélène Benghalem & Pierre Cahuc & Pierre Villedieu, 2021. "The Lock-In Effects of Part-Time Unemployment Benefits," SciencePo Working papers hal-03389159, HAL.
    19. Bart Cockx & Christian Goebel & Stéphane Robin, 2013. "Can income support for part-time workers serve as a stepping-stone to regular jobs? An application to young long-term unemployed women," Empirical Economics, Springer, vol. 44(1), pages 189-229, February.
    20. Feldstein, Martin S, 1976. "Temporary Layoffs in the Theory of Unemployment," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 937-957, October.
    21. Farber, Henry S, 1999. "Alternative and Part-Time Employment Arrangements as a Response to Job Loss," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 142-169, October.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Kyyrä, Tomi & Pesola, Hanna & Rissanen, Aarne, 2017. "Unemployment Insurance in Finland: A Review of Recent Changes and Empirical Evidence on Behavioral Responses," Research Reports 184, VATT Institute for Economic Research.
    2. Hélène Benghalem & Pierre Cahuc & Pierre Villedieu, 2022. "The Lock-in Effects of Part-Time Unemployment Benefits," Working Papers hal-03881625, HAL.
    3. Hélène Benghalem & Pierre Cahuc & Pierre Villedieu, 2022. "The Lock-in Effects of Part-Time Unemployment Benefits," SciencePo Working papers Main hal-03881625, HAL.

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    More about this item

    Keywords

    active labor market policies; part-time work; part-time unemployment; partial unemployment insurance;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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