Unemployment Insurance and Underemployment

Anna Godøy, Knut Røed.

IZA DP No. 7913


Should unemployment insurance (UI) systems provide coverage for underemployed job seekers? Based on a statistical analysis of Norwegian unemployment spells, we conclude
that the answer to this question is yes. Allowing insured job seekers to retain partial UI benefits during periods of insufficient part-time work not only reduces UI expenditures during the part-time work period; it also unambiguously reduces the time until a regular self-supporting job is found. Probable explanations are that even small temporary part-time jobs provide access to useful vacancy-information and that such jobs are used by employers as a screening device when hiring from the unemployment pool.
 

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Published Aug. 5, 2015 10:14 AM - Last modified Aug. 5, 2015 10:14 AM