Abstract
Search theory predicts that individuals will be more likely to exit unemployment as they approach the exhaustion of their unemployment benefits. Theory also predicts that individuals are likely to differ in the magnitude of their response to benefit exhaustion. The first prediction has been repeatedly verified. The second prediction has not been systematically tested but a close examination of the empirical literature provides some support. Building on this theoretical and empirical basis, I develop a parsimonious specification to examine variation in the impact of benefit exhaustion. The estimator can be implemented with standard statistical packages. An empirical example indicates that less educated workers have a much lower response to benefit exhaustion than more educated workers.
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Engberg, J.B. (2002). Variation in the Impact of Benefit Exhaustion on Unemployment Duration. In: Woodbury, S.A., Davidson, C. (eds) Search Theory and Unemployment. Recent Economic Thought Series, vol 76. Springer, Dordrecht. https://doi.org/10.1007/978-94-010-0235-6_6
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DOI: https://doi.org/10.1007/978-94-010-0235-6_6
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