This paper exploits an unemployment benefit extension for older workers in Taiwan to identify the effect of extended unemployment benefits on the reservation wage. Since 2009, the potential benefit duration for workers aged at least 45 at job loss has been 9 months rather than 6 months for those under 45. Using data from the Taiwanese Manpower Utilization Survey and a difference-in-differences design, I estimate that a three-month increase in potential duration of benefits increases the reservation wage for job losers by 4-5 percent. Moreover, the effect of extended benefits on the reservation wage is mainly driven by the reservation wage response during the extended benefit period and for workers who are most likely to exhaust their benefits. Combining the reduced-form estimates with a search model, my estimates suggest that it is welfare enhancing to increase the generosity of unemployment benefits for middle-aged workers.