Unemployment Insurance Eligibility and Employment Duration

While the literature on unemployment insurance (UI) has extensively documented the role of benefit level and duration, little is known about the e˙ect of UI eligibility conditions. These conditions often impose a minimum work history to qualify for UI benefits. In this paper, we exploit a French reform that softened this require-ment after 2009 to evaluate the impact of UI eligibility conditions on employment duration. Using administrative panel data matching employment and unemploy-ment spells, we provide evidence that the reform induced a jump in employment exits at the new threshold. Our results show that firms’ hiring decisions are instru-mental in this separation response: they schedule fixed-term contracts such that their duration coincide with the new minimum work history condition. The reform also a˙ects the employment duration of workers beyond those seeking UI eligibility, which indicates the emergence of a new norm in contract length.