The effect of the potential duration of unemployment benefits on unemployment exits to work and match quality in France

• We evaluate the impact of a large increase in the max duration of unemployment benefits.
• We find no significant effects on post-unemployment wages or job stability.
• We find significant positive effects on unemployment and non-employment duration.

Recent empirical literature finds very limited average effects of generous unemployment benefits on match quality. This study examines those effects in a setting where they could be large. We focus on workers with low employability and evaluate the impact of a large increase in potential benefit duration from 7 to 15 months. Our regression discontinuity design does not elicit significant short-term or medium-term effects on either employment duration or wages, whereas we find large positive effects on unemployment and non-employment duration.