The Effects of Unemployment Benefits on Unemployment and Labor Force Participation: Evidence from 35 Years of Benefits Extensions

41 Pages Posted: 31 May 2017

See all articles by Andrew Figura

Andrew Figura

Board of Governors of the Federal Reserve System - Macroeconomic Analysis Section

Regis Barnichon

Federal Reserve Bank of San Francisco

Multiple version iconThere are 2 versions of this paper

Date Written: 2014-08-13

Abstract

This paper presents estimates of the effect of emergency and extended unemployment benefits (EEB) on the unemployment rate and the labor force participation rate using a data set containing information on individuals likely eligible and ineligible for EEB back to the late 1970s. To identify these estimates, we examine how exit rates from unemployment change across different points of the distribution of unemployment duration when EEB is and is not available, controlling for changes in labor demand and demographic characteristics. We find that EEB increased the unemployment rate by about one-third percentage point in the most recent recession but did not affect the participation rate. In previous recessions, the effect of EEB on the unemployment rate was even smaller.

Keywords: Unemployment benefits extensions, unemployment rate, labor force participation rate

Suggested Citation

Figura, Andrew and Barnichon, Regis, The Effects of Unemployment Benefits on Unemployment and Labor Force Participation: Evidence from 35 Years of Benefits Extensions (2014-08-13). FEDS Working Paper No. 2014-65, Available at SSRN: https://ssrn.com/abstract=2976973

Andrew Figura (Contact Author)

Board of Governors of the Federal Reserve System - Macroeconomic Analysis Section ( email )

20th & C. St., N.W.
Mailstop 80
Washington, DC 20551
United States
(202) 452-2583 (Phone)
(202) 452-3819 (Fax)

Regis Barnichon

Federal Reserve Bank of San Francisco ( email )

101 Market Street
San Francisco, CA 94105
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
141
Abstract Views
908
rank
179,816
PlumX Metrics