Unemployment duration and the length of entitlement periods for unemployment benefits: do the IAB employment subsample and the German Socio-Economic Panel yield the same results?*

Abstract This paper analyzes empirically the distribution of unemployment durations in West Germany during the 1980s and 1990s. It therefore covers periods before and after the changes during the mid-1980s in the maximum entitlement periods for unemployment benefits for older unemployed. The analysis is based on the IAB employment subsample containing administrative data for about 500,000 individuals. Since these data only partly reveal the unemployment duration in an economic sense, we use a narrow and a wide proxy for unemployment. Our empirical analysis finds significant changes in the distribution of non-employment durations for older unemployed. At the same time, the distribution of unemployment durations between jobs remained unchanged after the reforms. Our findings clearly show that many firms and workers used the more beneficial laws as a part of early retirement packages. Surprisingly, for those workers who found and accepted a new job, we do not observe a prolongation of their search periods to a sizeable extent.

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Analysing the relationship between unemployment benefits and unemployment duration

Society and Economy ◽

10.1556/204.2020.00009 ◽

2020 ◽

Vol 42 (3) ◽

pp. 280-297

Author(s):

Laura Južnik Rotar ◽

Sabina Krsnik

Keyword(s):

Social Policy ◽

Negative Relationship ◽

Unemployment Duration ◽

Unemployment Benefits ◽

The European Union ◽

Homogeneous Groups ◽

Panel Data Regression ◽

Data Regression ◽

Duration Of Unemployment ◽

The Relationship

AbstractThe aim of this paper is to analyse the relationship between unemployment benefits and durations of unemployment with respect to different approaches in social policy. The hypothesis of the research is that unemployment benefits negatively affect the duration of unemployment. An analysis of the relationship concerning unemployment benefits and duration of unemployment within the European Union Member States (EU-28) between 2006–2018 using panel data regression approach was conducted. The sample was split into sub-samples in order to get more homogeneous groups of EU-28 countries. Estimation results suggest that the more generous a social policy, the more prevalent the negative relationship between unemployment duration and unemployment benefits. Our results also revealed that the better the economic situation, the less pressure is put on unemployment benefits and on the duration of unemployment.

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Does Extending Unemployment Benefits Improve Job Quality?

The American Economic Review ◽

10.1257/aer.20150528 ◽

2017 ◽

Vol 107 (2) ◽

pp. 527-561 ◽

Cited By ~ 57

Author(s):

Arash Nekoei ◽

Andrea Weber

Keyword(s):

Unemployment Insurance ◽

Negative Relationship ◽

Unemployment Duration ◽

Duration Dependence ◽

Regression Discontinuity Design ◽

Matching Function ◽

Unemployment Benefits ◽

Wage Effect ◽

Wage Effects ◽

Positive Effect

Contrary to standard search models predictions, past studies have not found a positive effect of unemployment insurance (UI) on reemployment wages. We estimate a positive UI wage effect exploiting an age-based regression discontinuity design in Austria. A search model incorporating duration dependence predicts two countervailing forces: UI induces workers to seek higher-wage jobs, but reduces wages by lengthening unemployment. Matching-function heterogeneity plausibly generates a negative relationship between the UI unemployment-duration and wage effects, which holds empirically in our sample and across studies, reconciling disparate wage-effect estimates. Empirically, UI raises wages by improving reemployment firm quality and attenuating wage drops. (JEL J31, J64, J65)

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Using the Variation in Potential Duration of Unemployment Benefits to Estimate the Causal Effect of Unemployment Duration on Re-Employment Wages

SSRN Electronic Journal ◽

10.2139/ssrn.2847129 ◽

2016 ◽

Author(s):

Marta C Lopes

Keyword(s):

Causal Effect ◽

Unemployment Duration ◽

Unemployment Benefits ◽

Duration Of Unemployment

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A review on the elasticity of unemployment duration to the potential duration of unemployment benefits

Journal of Economic Surveys ◽

10.1111/joes.12479 ◽

2021 ◽

Author(s):

Marta C. Lopes

Keyword(s):

Unemployment Duration ◽

Unemployment Benefits ◽

Duration Of Unemployment

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Unemployment duration and the duration of entitlement to unemployment benefits: an empirical study for Britain

Applied Economics ◽

10.1080/000368499323526 ◽

1999 ◽

Vol 31 (9) ◽

pp. 1043-1051 ◽

Cited By ~ 9

Author(s):

ELENA G. F. STANCANELLI

Keyword(s):

Empirical Study ◽

Unemployment Duration ◽

Unemployment Benefits

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Beschäftigung und Arbeitslosigkeit älterer Arbeitnehmer / Employment and Unemployment of the Elderly

Jahrbücher für Nationalökonomie und Statistik ◽

10.1515/jbnst-2007-0105 ◽

2007 ◽

Vol 227 (1) ◽

Cited By ~ 1

Author(s):

Eva Müller ◽

Ralf A. Wilke ◽

Philipp Zahn

Keyword(s):

Empirical Analysis ◽

Unemployment Insurance ◽

Early Retirement ◽

The Elderly ◽

Unemployment Duration ◽

Unemployment Benefits ◽

German Government ◽

The Public ◽

Employment Agency ◽

Unemployment Insurance System

SummaryIn 1997, the German government enacted a reform of the unemployment insurance system which lead to a reduction of the maximum entitlement length for unemployment benefits of the older unemployed in the subsequent years. This paper analyses the effects of this reform on the risk of unemployment and on unemployment duration of the older unemployed aged 54-56. This group is of particular interest because it lost a smooth early retirement path via the unemployment benefits scheme. In our empirical analysis we use German administrative individual data drawn form the registers of the federal employment agency and of the public pension funds. After the reform we expect a lower risk of unemployment and shorter unemployment durations for the considered age group. This is confirmed by our empirical analysis. We show that the reform effectively reduced the amount of early retirement at the expense of the unemployment insurance. In particular larger companies and their employees use extended entitlement periods for unemployment benefits for early retirement purposes.

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