Unemployment Insurance Extensions, Labor Market Concentration, and Match Quality

Written by:
Working Paper Number: CES-26-24

Abstract

I investigate whether the effects of UI extensions are different for workers exposed to higher levels of local labor market concentration, a potential source of employer market power. I exploit measurement error in state unemployment rates that led to quasi-random assignment of UI durations in the U.S. during the Great Recession. Using matched employer-employee data from the Longitudinal Employer-Household Dynamics program, I find that UI extensions lengthen nonemployment durations by one week and cause economically meaningful but not statistically significant increases in earnings. The UI-earnings effect is significantly lower at higher levels of concentration, while there is no difference in the UI-duration effect. The lower UI-earnings effect is driven by the extremes of the distribution of concentration. My results suggest that match improvements from UI are attenuated at higher levels of concentration.

Error 404 Not Found

HTTP ERROR 404 Not Found

URI:/content/census/en/library/working-papers/2026/adrm/CES-WP-26-24/_jcr_content/root/responsivegrid/othersinseries.nocache.html/census/components/common/body/othersinseries.vsdi
STATUS:404
MESSAGE:Not Found
SERVLET:org.apache.felix.http.base.internal.dispatch.DispatcherServlet-2e2c122d
Error 404 Not Found

HTTP ERROR 404 Not Found

URI:/content/census/en/library/working-papers/2026/adrm/CES-WP-26-24/_jcr_content/root/responsivegrid_1843152900/relatedinfolist.nocache.html/census/components/common/body/relatedinfolist.vsdi
STATUS:404
MESSAGE:Not Found
SERVLET:org.apache.felix.http.base.internal.dispatch.DispatcherServlet-2e2c122d
Page Last Revised - May 7, 2026