Working Paper: NBER ID: w31807
Authors: Matthew Gudgeon; Pablo Guzman; Johannes F. Schmieder; Simon Trenkle; Han Ye
Abstract: This paper shows empirically that the non-employment effects of unemployment insurance (UI) for older workers depend in a first-order way on the structure of retirement policies. Using German data, we first present reduced-form evidence of these interactions, documenting large bunching in UI inflows at the age that allows workers to claim their pension following UI expiration. We then estimate a dynamic life-cycle model and use it to directly quantify how the effects of UI vary with retirement policies. Accounting for interactions across UI and retirement institutions also helps explain otherwise difficult-to-explain trends in the unemployment rate of older German workers.
Keywords: Unemployment Insurance; Retirement Policies; Germany; Labor Economics; Dynamic Lifecycle Model
JEL Codes: E24; J2; J26; J6; J63; J64; J65; J68
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| unemployment insurance extensions (J65) | nonemployment durations (J64) |
| unemployment insurance extensions (J65) | unemployment rate of older workers aged 55-59 (J14) |
| retirement policies (J26) | nonemployment effects of UI extensions (J65) |
| age 60 (J14) | spike in UI inflows (J65) |
| spike in UI inflows (J65) | transition to retirement (J26) |
| retirement policies (J26) | rise in unemployment rates among older workers (J26) |