A model of unemployment duration is estimated with weekly micro data on Canadian men. Ent itlement provisions in the unemployment insurance program and demand conditions are found to have a significant effect on the probability of leaving unemployment. The probability of a worker leaving unemploy ment declines with the duration of unemployment, holding unemployment insurance entitlement constant. When entitlement is allowed to vary, the probability of leaving first falls and then generally rises with unemployment duration. These results are robust with respect to allo wing for person-specific unobserved heterogeneity and alternative spe cifications of duration dependence. Copyright 1987 by University of Chicago Press.

In this paper we examine whether the requirements that workers must satisfy to qualify for unemployment insurance (UI) benefits in any succeeding period of joblessness affect the duration of employment spells. This behavioral consequence of a UI system has been neglected in empirical research, which has instead focused on the effects of UI parameters on the actions of the unemployed. The effect is identified by a unique change in the eligibility requirements of the Canadian UI system in 1990, which increased the weeks of employment required to establish UI eligibility. We provide a variety of estimates of this behavioral effect. In our preferred set of results, we find a significant increase in the employment hazard in the week that an individual satisfies the eligibility requirement in many regions of the country. In the spirit of Feldstein's (1976) study of temporary layoffs, the results provide new evidence of the impact of UI system parameters on the actions of employers and workers.