Do Unemployment Benefits Increase Unemployment? New Evidence on an Old Question

摘要: We examine the relationship between unemployment benefits and using Swedish regional data. To estimate effect of an increase in insurance (UI) on we exploit ceiling UI benefits. The benefit ceiling, coupled with fact that there are wage differentials, implies generosity varies regionally. More importantly, actual within region over time due to variations ceiling. find fairly robust evidence suggesting does matter for unemployment. Increases replacement rate contribute higher as suggested by theory. also show removing cap receipt would reduce dispersion This result is low regions tend be high where has a greater bite. Removing thus increases more regions.