The Effect of Unemployment Benefits on the Duration of Unemployment: New Evidence from a Regression Kink Design in Missouri, 2003-2013∗

We provide new evidence on the elasticity of the unemployment insurance (UI) weekly benefit amount on unemployment insurance spells based on administrative data from the state of Missouri covering the period 2003-2013. Identification comes from a regression kink design that exploits the quasi-experimental variation around the kink in the UI benefit schedule. We find that unemployment durations are more responsive to benefit levels during the recession and its aftermath, with an elasticity of about 0.9 as compared to 0.35 pre-recession. ∗We thank seminar participants at Brandeis University for helpful comments.