The Effect of Extended Unemployment Insurance Benefits: Evidence from the 2012-2013 Phase-Out

Authors

Henry S. Farber

Jesse Rothstein

Download PDF
(275 KB)

2015-03 | January 1, 2015

Unemployment Insurance benefit durations were extended during the Great Recession, reaching 99 weeks for most recipients. The extensions were rolled back and eventually terminated by the end of 2013. Using matched CPS data from 2008-2014, we estimate the effect of extended benefits on unemployment exits separately during the earlier period of benefit expansion and the later period of rollback. In both periods, we find little or no effect on job-finding but a reduction in labor force exits due to benefit availability. We estimate that the rollbacks reduced the labor force participation rate by about 0.1 percentage point in early 2014.

Article Citation

Farber, Henry S., Jesse Rothstein, and Robert G. Valletta. 2015. “The Effect of Extended Unemployment Insurance Benefits: Evidence from the 2012-2013 Phase-Out,” Federal Reserve Bank of San Francisco Working Paper 2015-03. Available at https://doi.org/10.24148/wp2015-03

About the Author
Robert G. Valletta
Robert G. Valletta is senior vice president and associate director of research in the Economic Research Department of the Federal Reserve Bank of San Francisco. Learn more about Robert G. Valletta