When Institutions Interact: How the Effects of Unemployment Insurance are Shaped by Retirement Policies
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Series
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Speaker(s)Simon Trenkle (Institute for Employment Research (IAB), Germany)
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FieldEmpirical Microeconomics
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LocationTinbergen Institute Amsterdam, room 1.01
Amsterdam -
Date and time
November 04, 2025
15:30 - 16:30
Abstract
We show that the non-employment effects of unemployment insurance (UI) for older workers depend critically on retirement policy. Using German data, we document large bunching in UI inflows at the age that allows workers to claim their pension following UI expiration. Inflows respond strongly to several UI and pension reforms. We probe the implications of these behavioral responses using a dynamic model and find that Germany’s UI and retirement policy changes had substantial effects on the unemployment rate of older workers. Furthermore, we calculate large fiscal externalities from extending UI for older workers, especially under generous retirement policies. Joint paper with Matthew Gudgeon, Pablo Guzman, Johannes Schmieder and Han Ye.