Unemployment Benefits, Unemployment Duration and Subsequent Job Quality

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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