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    Does Reducing Unemployment Benefits During a Recession Reduce Youth Unemployment? Evidence from a 50% Cut in Unemployment Assistance


    O'Neill, Donal and Doris, Aedin and Sweetman, Olive (2017) Does Reducing Unemployment Benefits During a Recession Reduce Youth Unemployment? Evidence from a 50% Cut in Unemployment Assistance. IZA Discussion Papers, 10727. ISSN 2365-9793

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    Abstract

    We use administrative data to examine the effect of a 50% benefit cut for young unemployed workers in Ireland during the Great Recession. Because the cut applied only to new benefit claims, claimants whose unemployment start dates differed by a matter of days received very different benefits; we exploit this fact in our Regression Discontinuity and Difference-in-Difference analyses. While we find no impact on unemployment duration for those aged 20–21, the benefit cut significantly reduced duration for 18 year olds, with an estimated elasticity close to one. We consider possible explanations for our findings and also examine long-run effects.

    Item Type: Article
    Keywords: unemployment assistance; labour supply; regression discontinuity; Unemployment: Models, Duration, Incidence, and Job Search;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 11368
    Depositing User: Donal O'Neill
    Date Deposited: 18 Oct 2019 09:42
    Journal or Publication Title: IZA Discussion Papers
    Publisher: Institute of Labor Economics
    Refereed: Yes
    URI:

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