An Empirical Analysis of the Effect of Unemployment Insurance on Occupational Mobility

This paper assesses the effect of unemployment insurance (UI) generosity on occupational mobility. It is noted that this effect is theoretically ambiguous since UI offsets the cost of switching (which increases mobility), and enables workers to look for a job within the current occupation (which decreases mobility). Using data from the Survey of Income and Program Participation, I analyze the relationship between UI generosity and the probability of switching occupations for unemployed individuals. I show that increasing UI benefit levels leads to a decrease in the probability of switching occupations, and provide further evidence that the effect is stronger during recessions and for individuals in low-wealth households.Bachelor of Art