TY  - RPRT
        AU  - Keum, Daniel
AU  - Meier, Stephan
        TI  - License to Fire? Unemployment Insurance and the Moral Cost of Layoffs
        PY  - 2020/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 13497
        UR  - https://www.iza.org/publications/dp13497
        AB  - Expanding unemployment insurance (UI) not only reduces the burden for the unemployed but also the moral cost of layoffs to firms and their managers. Using staggered expansions of UI across US states, we show that expanding UI leads to larger layoffs in firms experiencing negative economic shocks. The effects are stronger in weakly governed and financially unconstrained firms, where managers have greater discretion to avoid moral cost. This study presents moral cost as a novel microeconomic channel through which UI affects layoff decisions, which can compromise its effectiveness as a social insurance program and an automatic stabilizer.
        KW  - managers
KW  - layoffs
KW  - unemployment insurance
KW  - prosocial behavior
        ER  -