A quantitativeanalysisofunemploymentbenefitextensions

Extensions ofunemploymentinsurance(UI)benefits havebeenimplementedinresponseto the GreatRecession.Thispapermeasurestheeffectoftheseextensionsontheunemploy- ment rateusingacalibratedstructuralmodelfeaturing jobsearchandconsumption-saving decisions,skilldepreciation,andUIeligibility.TheongoingUIbenefitextensionsarefoundto have raisedtheunemploymentrateby1.4percentagepoints,whichisabout30%ofthe observedincreasesince2007.Moreover,thecontributionoftheUIbenefitextensionstothe elevatedunemploymentrateincreasedduring 2009–2011;whilethenumberofvacancies recovered, thesuccessiveextensions keptsearchintensitydown