In West Germany during the 1980s, law changes cut the level of unemplo
yment compensation for the unemployed without children and extended th
e duration of unemployment insurance for unemployed aged over 41. Anal
ysis of these changes using the German Socioeconomic Panel shows that
transitions from unemployment for those under 49 were particularly res
ponsive to extensions of unemployment insurance. The implied elasticit
y for escapes of men to employment is similar to estimates for men in
the United States, suggesting that differences in the potential durati
on of unemployment insurance only partially explain the difference in
spell lengths between Germany and the United States.