The effects of unemployment insurance on postunemployment earnings

There is surprisingly little research into the effects of unemployment insu rance (UI) on postunemployment wage outcomes. Moreover, the few existing st udies are sufficiently varied in their approach and conclusions that experi enced observers have reached very different interpretations of their implic ations. We provide new estimates of the effect of UI on subsequent earnings , using data on workers displaced in the period 1983-1990. Our objective is to provide a systematic evaluation of the approaches used in the existing Literature, We find some limited evidence of a favorable impact of UI on ea rnings, but only when we compare recipients with nonrecipients. Even in thi s case, our point estimates Lie well below those reported in earlier studie s that pointed to beneficial UI effects. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: J64; J65.