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When Institutions Interact: How the Effects of Unemployment Insurance are Shaped by Retirement Policies

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Listed:
  • Matthew Gudgeon
  • Pablo Guzman-Pinto
  • Johannes Schmieder
  • Simon Trenkle
  • Han Ye

Abstract

This paper shows empirically that the non-employment effects of unemployment insurance (UI) for older workers depend in a first-order way on the structure of retirement policies. Using German data, we first present reduced-form evidence of these interactions, documenting large bunching in UI inflows at the age that allows workers to claim their pension following UI expiration. We then estimate a dynamic life-cycle model and use it to directly quantify how the effects of UI vary with retirement policies. Accounting for interactions across UI and retirement institutions also helps explain otherwise difficult-to-explain trends in the unemployment rate of older German workers.

Suggested Citation

  • Matthew Gudgeon & Pablo Guzman-Pinto & Johannes Schmieder & Simon Trenkle & Han Ye, 2023. "When Institutions Interact: How the Effects of Unemployment Insurance are Shaped by Retirement Policies," CRC TR 224 Discussion Paper Series crctr224_2023_481, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2023_481
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp481
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    References listed on IDEAS

    as
    1. Simon Jäger & Shakked Noy & Benjamin Schoefer, 2022. "The German Model of Industrial Relations: Balancing Flexibility and Collective Action," Journal of Economic Perspectives, American Economic Association, vol. 36(4), pages 53-80, Fall.
    2. Schneider, Hilmar & Stuhler, Jan, 2007. "Die fiskalischen Kosten der SGB-Regelungen zum erleichterten Bezug von Arbeitslosengeld für Ältere (58er-Regelung)," IZA Research Reports 15, Institute of Labor Economics (IZA).
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    More about this item

    Keywords

    Unemployment insurance; moral hazard; retirement; older workers; interactions;
    All these keywords.

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • 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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