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Disemployment Effects of Unemployment Insurance: A Meta-Analysis

Author

Listed:
  • Jonathan P. Cohen
  • Peter Ganong

Abstract

We systematically review studies of how unemployment benefits affect unemployment duration. Statistically significant findings are eleven times more likely to be published. Correcting for publication bias halves the average elasticity. Meta-analysis provides a principled way for sufficient statistics methods to aggregate estimates across policy contexts and speak to the optimality of large reforms. Although existing consumption drop-based approaches typically imply an optimal replacement rate near zero, our corrected estimates imply an optimal replacement rate of 28%. The "micro" elasticity is equal to the "macro" elasticity, suggesting that general equilibrium effects are unimportant or cancel out.

Suggested Citation

  • Jonathan P. Cohen & Peter Ganong, 2024. "Disemployment Effects of Unemployment Insurance: A Meta-Analysis," NBER Working Papers 32832, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32832
    Note: LS ME PE
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    More about this item

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • 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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