Unemployment Insurance and Underemployment
Anna Godøy and Knut Røed.
IZA Discussion Paper No. 7913, January 2014.
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 selfsupporting 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.