Centeno, Mário. 2004. "The Match Quality Gains from Unemployment Insurance." Journal of Human Resources 39(3): 839-863.

This paper assesses the benefits of unemployment insurance (UI) by measuring its effect in match quality. We note that UI generosity should affect the decision to match or not and should therefore have some effect on match quality. Using NLSY data, we analyze the relationship between postunemployment job tenure and measures of the state-level UI generosity and the unemployment rate at the time the job is started. We show that greater UI generosity leads to longer job tenure. Furthermore, we find some evidence that this effect is more pronounced during busts, UI having a limited dampening effect on the cyclical variation in match quality.

Mário Centeno is a research associate at the Banco de Portugal and a professor of economics at ISEG-UTL. The author acknowledges two anonymous referees for very helpful suggestions. He also thanks Caroline Minter Hoxby, Larry Katz, Chris Foote, Pedro Portugal and Lorenzo Isla for many comments and helpful discussions and participants at the 2002 EEA and LACEA Conferences and seminars at Harvard University, Universidade Técnica de Lisboa and Universidade Católica Portuguesa. Financial support of the Banco de Portugal and Fundação para a Ciência e Tecnologia is gratefully acknowledged. The data used in this article can be obtained beginning January 2005 through December 2008 from Mário Centeno, Av. Almirante Reis, 71 6° 1150-012 Lisbon, Portugal.