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Spillover Effects Between the Insured and Uninsured Unemployed

Author

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  • Phillip B. Levine

    (Princeton University)

Abstract

In this paper, I consider the effect of changing the level of unemployment insurance (UI) benefits on workers who do not receive UI. I hypothesize that a spillover effect between insured and uninsured workers exists so that an increase in the UI benefits, which leads to longer durations of unemployment for insured workers, will lead to a reduction in the duration of unemployment for the uninsured. This prediction is tested using data from several March Current Population Surveys and the National Longitudinal Survey of Youth. In both samples I find that an increase in UI benefits leads to a reduction in the duration of unemployment for uninsured workers. Furthermore, using several years of state level data, I show that the estimated effect on unemployment for the entire labor force is roughly zero when I allow for the spillover effect.

Suggested Citation

  • Phillip B. Levine, 1991. "Spillover Effects Between the Insured and Uninsured Unemployed," Working Papers 663, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:283
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    Keywords

    unemployment insurance; uninsured workers; spillover effect;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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