The effects of unemployment insurance in late career: Evidence from Social Security offsets

This paper studies the effects of unemployment insurance (UI) benefits for retirement-age workers. It shows that UI benefits can raise reported search effort and labor force participation for this population. Estimated effects on subsequent employment are positive but small and statistically indistinguishable from zero. The results are contrasted with estimates showing negative effects of UI on reemployment for younger workers. The identifying variation is generated by the elimination of Social Security offsets: state-level policies that reduce unemployment benefits for Social Security beneficiaries. The findings are consistent with a simple model of UI claiming with participation and work search requirements.