Revisiting the Effects of Unemployment Insurance Extensions on Unemployment: A Measurement Error-Corrected RD Approach

Abstract

<p>We reassess the literature using county border pair identification strategies to examine the effects of UI benefit duration on labor market conditions. We extend these previous approaches using a regression discontinuity-based approach that controls for changes in unobservables by distance to the border and accounts for measurement error induced by using county-level aggregates. Our new results provide no evidence of a large change in unemployment induced by differences in UI generosity across state boundaries, bringing the evidence from border-based identification strategies in line with estimates from other strands of the UI benefit duration literature.</p>