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STICERD Work in Progress Seminars

Happy Birthday? Manipulation and Selection in Unemployment Insurance

Kilian Russ (University of Bonn)

Friday 18 May 2018 13:00 - 14:00

This event will take place online.

Many of our seminars and public events this year will continue as online seminars or as online and in person. Please check our website listings and Twitter feed @STICERD_LSE for updates.

Unless otherwise specified, current restrictions mean in-person seminars are only open to members of the LSE community (those with a valid LSE ID card).

Those unable to join the seminars in-person are welcome to participate via zoom.

About this event

This paper documents strategic delays in the timing of layoffs around an age-at-layoff threshold entitling workers to a four months increase in potential UI benefit duration in Italy. Manipulation is quantitatively important and of far-reaching consequences: 12.5\% of layoffs in the manipulation region are strategically delayed with affected workers increasing their average UI benefit receipt and non-employment duration by 3.0 and 7.1 months, respectively. Manipulators are highly selected on both observables and unobservables. Manipulation is most prevalent among female, part-time, white-collar workers with longer job tenure at small firms. We show that compared to non-manipulators: (i) manipulators would have had higher exit rates from unemployment at each point during the unemployment spell, and (ii) manipulators' benefit receipt duration responds 25\% stronger to the increase in potential benefit duration. We study the welfare consequences of our results and discuss implications for standard RD-estimates.

This event will take place online.