EXPECTATIONS OF UNEMPLOYMENT-INSURANCE AND UNEMPLOYMENT DURATION

Over the years there have been frequent changes in unemployment insura nce(UI) benefits. Such changes could influence spells in progress as w ell as future spells. If individuals anticipate changes, they are like ly to adjust their behavior. The effect of changes in benefits on unem ployment duration, therefore, will be difficult to predict accurately without accounting for individual expectations. This article investiga tes the extent to which individuals anticipate changes in UI entitleme nt. The results suggest that individuals have significant, although no t perfect, foresight about changes in UI provisions. Assuming perfect foresight might represent actual expectations more closely than assumi ng no foresight.