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Title: Spillover Effects Between the Insured and Uninsured Unemployed
Authors: Levine, Phillip
Keywords: unemployment insurance
uninsured workers
spillover effect
Issue Date: 1-May-1991
Citation: Industrial and Labor Relations Review, vol. 47, no. 1, October 1993
Series/Report no.: Working Papers (Princeton University. Industrial Relations Section) ; 283
Abstract: In this paper, I consider the effect of changing the level of unemployment insurance (UI) benefits on workers who do not receive UI. I hypothesize that a spillover effect between insured and uninsured workers exists so that an increase in the UI benefits, which leads to longer durations of unemployment for insured workers, will lead to a reduction in the duration of unemployment for the uninsured. This prediction is tested using data from several March Current Population Surveys and the National Longitudinal Survey of Youth. In both samples I find that an increase in UI benefits leads to a reduction in the duration of unemployment for uninsured workers. Furthermore, using several years of state level data, I show that the estimated effect on unemployment for the entire labor force is roughly zero when I allow for the spillover effect.
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