Staff Reports
Individual and Market-Level Effects of UI Policies: Evidence from Missouri
Number 905
December 2019

JEL classification: E24, J63, J64, J65

Authors: Fatih Karahan, Kurt Mitman, and Brendan Moore

We develop a method to jointly measure the response of worker search effort (individual effect) and vacancy creation (market-level effect) to changes in the duration of unemployment insurance (UI) benefits. To implement this approach, we exploit an unexpected cut in UI durations in Missouri and provide quasi-experimental evidence on the effect of UI on the labor market. The data indicate that the cut in Missouri significantly increased job finding rates by both raising the search effort of unemployed workers and the availability of jobs. The latter accounts for at least a third and up to 100 percent of the total effect.

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AUTHOR DISCLOSURE STATEMENT(S)
Fatih Karahan
For the research that resulted in “Individual and Market-Level Effects of UI Policies: Evidence from Missouri,” I attest to the following:

1. Financial support for my research came entirely from my employer, the Federal Reserve Bank of New York.
2. I have not received any financial or in-kind support for this research from anyone other than the entities listed above.
3. I have no paid or unpaid positions as officer, director, or board member of any relevant non-profit organizations or profit-making entities.
4. I have no close relative or partners who received financial support from or work in any position at any relevant entity.
5. The results use data from the Conference Board Help Wanted Online dataset that are not publicly available. These results have been reviewed by the Conference Board to ensure that no confidential information is disclosed.

Kurt Mitman
I attest to the following:

1. Financial support for my research came from my employer, the Institute for International Economic Studies at Stockholm University, the European Research Council and the Ragnar Söderberg Stiftelse.
2. I have not received any financial or in-kind support for this research from anyone other than the entities listed above.
3. I have no paid or unpaid positions as officer, director, or board member of any relevant nonprofit organizations or profit-making entities.
4. I have no close relatives or partners who received financial support from or work in any position at any relevant entity.

Brendan Moore
I attest to the following:

1. Financial support for my research came from my employer, the Federal Reserve Bank of New York.
2. I have not received any financial or in-kind support for this research from anyone other than the Federal Reserve Bank of New York.
3. I have no paid or unpaid positions as officer, director, or board member of any relevant nonprofit organizations or profit-making entities.
4. I have no close relatives or partners who received financial support from or work in any position at any relevant entity.