Template-Type: ReDIF-Paper 1.0
Title: When Institutions Interact: How the Effects of Unemployment Insurance are Shaped by Retirement Policies
Author-Name: Matthew Gudgeon
Author-Email: matthew.gudgeon@tufts.edu
Author-Name: Pablo Guzman-Pinto
Author-Email: guzmanpi@amazon.com
Author-Name: Johannes Schmieder
Author-Email: johannes@bu.edu
Author-Name: Simon Trenkle
Author-Email: Trenkle@iza.org
Author-Name: Han Ye
Author-Email: han.ye@uni-mannheim.de
Classification-JEL: J26, J64, J65
Keywords: Unemployment insurance, moral hazard, retirement, older workers, interactions

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.
Note: 
Length: 102
Creation-Date: 2023-12
Revision-Date: 2025-10
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp481
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2023_481v2