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Session Overview
B07: Unemployment Benefits and Paycheck Protection Programs
Wednesday, 18/Aug/2021:
12:30pm - 2:00pm

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12:30pm - 12:52pm

Entitled to Leave: the Impact of Unemployment Insurance Eligibility on Employment Duration and Job Quality

Laura Khoury1, Clément Brebion2, Simon Briole3

1Norwegian School of Economics, Norway; 2Copenhagen Business School, Denmark; 3Paris School of Economics, JPAL, France

In this paper, we provide a comprehensive evaluation of a reform that softened the minimum employment record to qualify for UI benefits in France after 2009. Using administrative panel data matching employment and unemployment spells, we first provide clear evidence that the reform induced a separation response at the eligibility threshold. The jump in transitions from employment to unemployment is partly explained by the scheduling of shorter contracts, in line with the new eligibility condition. Exploiting the reform as well as relevant sample restrictions, we then estimate the effects of receiving UI benefits on subsequent labor market outcomes using a regression discontinuity design. Our findings point to a large negative impact of UI benefits receipt on employment probability up to 21 months after meeting the eligibility condition, which is not counterbalanced by an increase in job quality.

Khoury-Entitled to Leave-482.pdf

12:52pm - 1:15pm

Multigenerational Spillover Eects of Unemployment Insurance Reform: Grandparents' Labour Supply and Grandchildren's Educational Outcomes

Jim Been1, Anne Gielen2, Marike Knoef3, Gloria Moroni4

1Leiden University; 2Erasmus School of Economics, Netherlands, The; 3Leiden University; 4Erasmus School of Economics, Netherlands, The

The 2004 unemployment insurance reform introduced in the Netherlands increased the labour supply of individuals above 57.5 years old - age when individuals are likely to be grandparents (generation 1). Using unique administrative data covering three generations in families, we investigate the spillover effect of this reform on their grandchildren (generation 3). We implement an IV strategy which exploits exogenous variation yielded by the policy introduction date and the age eligibility criteria to instrument for grandparents being active on the labour market. We find a positive impact of grandfathers' activity on the grandchildren's educational outcomes. We provide evidence on potential direct mechanisms driving this relationship - i.e. going directly from grandfathers to grandchildren - as well as potential indirect mechanisms - i.e. mediated by changes in mothers' (generation 2) labour supply and fertility.

Been-Multigenerational Spillover Eects of Unemployment Insurance Reform-237.pdf

1:15pm - 1:37pm

The Impact Of A European Unemployment Benefit Scheme On Labour Supply And Income Distribution

Agathe Simon


This paper investigates the effect of the introduction of a European unemployment insurance (EMU-UI) on the labour supply for the Eurozone countries. Based on a structural estimation of labour supply and using the European tax-benefit microsimulation model EUROMOD, we simulate various scenarios of reform.

The results show that the labour supply response to the reform differs substantially across countries. The strongest labour supply reaction to the introduction of a EMU-UI are found in Italy, Portugal, Latvia and Lithuania regardless of EMU-UI design. We find higher disincentive to work effects for women in couple and single men. The EMU-UI characteristics affect differently labour supply as our third scenario tends to imply stronger labour supply reaction, however it would perform better against poverty and income inequality in many countries. An EMU-UI with floor and ceiling amounts tends to limit labour supply distortions while reducing inequalities and poverty.

Simon-The Impact Of A European Unemployment Benefit Scheme-411.pdf

1:37pm - 2:00pm

An Evaluation of the Paycheck Protection Program Using Administrative Payroll Microdata

David Autor1, David Cho2, Leland Crane2, Mita Goldar3, Byron Lutz2, Joshua Montes2, William Peterman2, David Ratner2, Daniel Villar2, Ahu Yildirmaz3

1Massachusetts Institute of Technology; 2Federal Reserve Board, United States of America; 3ADP

The Paycheck Protection Program (PPP) was intended to assist small businesses to maintain employment and wages during the COVID-19 crisis, as well as cover other expenses. We use administrative, high-frequency employment data from ADP---one of the world's largest payroll processing firms---to estimate the causal effect of the PPP on the evolution of payroll employment at PPP-eligible firms relative PPP-ineligible firms. Our estimates indicate that the PPP boosted employment at eligible firms by between 2 percent to 5 percent at its peak effect around mid-May 2020. We find that the boost to employment waned thereafter and ranged from no effect to a 3 percent boost at the end of 2020. Overall, while the PPP appears to have substantially boosted employment during the worst months of the pandemic, we conclude that the cost per job saved was substantial.

Autor-An Evaluation of the Paycheck Protection Program Using Administrative Payroll Microdata-129.pdf

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