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The Importance of Unemployment Insurance as an Automatic Stabilizer / Marco Di Maggio, Amir Kermani.
- Format:
- Book
- Author/Creator:
- Di Maggio, Marco.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w22625.
- NBER working paper series no. w22625
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2016.
- Summary:
- We assess the extent to which unemployment insurance (UI) serves as an automatic stabilizer to mitigate the economy's sensitivity to shocks. Using a local labor market design based on heterogeneity in local benefit generosity, we estimate that a one standard deviation increase in generosity attenuates the effect of adverse shocks on employment growth by 7% and on earnings growth by 6%. Consistent with a local demand channel, we find that consumption is less responsive to local labor demand shocks in counties with more generous benefits. Our analysis finds that the local fiscal multiplier of unemployment insurance expenditure is approximately 1.9.
- Notes:
- Print version record
- September 2016.
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