[séminaire CREM] Unemployment Insurance Eligibility and Employment Duration

Abstract :
While the literature on unemployment insurance (UI) has extensively documented the role of benefit level and duration, little is known about the effect of UI eligibility conditions. These conditions often impose a minimum work history to qualify for UI benefits. In this paper, we exploit a French reform that softened this requirement after 2009 to evaluate the impact of UI eligibility conditions on employment duration. Using administrative panel data matching employment and unemployment spells, we provide evidence that the reform induced a jump in employment exits at the new threshold. Our results show that firms’ hiring decisions are instrumental in this separation response: they schedule fixed-term contracts such that their duration coincide with the new minimum work history condition. The reform also affects the employment duration of workers beyond those seeking UI eligibility, which indicates the emergence of a new norm in contract length.

Co-écrit avec Simon Briole & Laura Khoury