For my research paper I have sought to understand what
exactly lengthens the duration of unemployment for recently laid off
workers. I believe this is an
important question because unemployment in the U.S is an incredibly relevant and
important topic in the economy today.
Any incite as to what increases unemployment could have large policy
implications. More specifically, I
want to know whether unemployment insurance has a direct and significant impact
on how long the recently unemployed stay unemployed.
I
have created a linear regression model where the duration of unemployment is my
dependent variable. I used the
amount of unemployment insurance claims, the amount of job losers as a
percentage of the unemployed, and GDP as my independent variables.
I
have found through my research that unemployment insurance has a strong
positive relationship on the duration of unemployment. Increasing the amount of unemployment
insurance greatly increases the duration of unemployment. This becomes even accurate when I
control for the effect on job losers instead of the general unemployed
population. Also, by controlling for GDP I am able to control for time trends
and recessions that also affect the duration of unemployment. My results show that incorporating the
GDP variable increase the power of my model.
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