SPILLOVER EFFECTS BETWEEN THE INSURED AND UNINSURED UNEMPLOYED

This paper examines the effect of changing the level of unemployment i nsurance (UI) benefits on workers who do not receive UI. The author hy pothesizes a spillover effect between insured and uninsured workers wh ereby an increase in UI benefits, which leads to longer durations of u nemployment for insured workers, results in a reduction in the duratio n of unemployment for the uninsured. This prediction is supported in t ests of data from several March Current Population Surveys, the Nation al Longitudinal Survey of Youth, and aggregate, state-level data.