Unemployment prevention: The role of Human Resource Management in job-to-job transitions in the event of redundancy

In downsizing organisations, redundant workers suffer from insecurities about work and income. Social security provides income security to the unemployed in the event of job loss. The role played by employers in unemployment prevention for redundant workers, and the effects on unemployment spells and transitions on the labour market, are neglected in both the social policy and HRM literatures. This article addresses the following question: Which factors play a role in the decision to offer job-to-job support and in determining its effect? This article provides the context for the theoretical assumptions regarding why employers initiate job-to-job measures for redundant employees and distinguishes the different types of measures based on a literature review. Secondly, this article contributes to empirical knowledge in the field of unemployment prevention among employers and the effects of job-to-job activities facilitated by employers on redundant workers’ unemployment spells. A two-wave study was conducted on a sample of 2,258 Dutch redundant workers. The study shows that age, breadwinner status and gender are important predictors of unemployment duration after involuntary dismissal. The findings show that investing in the human capital of redundant workers by providing training and education and individual coaching, for example, are associated with a reduced unemployment spell. In our model, in which we controlled for other variables, we found that when one received training, education or individual coaching shortly before or after the dismissal, one was unemployed for an average of almost three months less.

Unemployment Insurance and Job Search Behavior*

How does unemployment insurance (UI) affect unemployed workers’ search behavior? Search models predict that, until benefit exhaustion, UI depresses job search effort and increases reservation wages. Over an unemployment spell, search effort should increase up to benefit exhaustion, and stay high thereafter. Meanwhile, reservation wages should decrease up to benefit exhaustion and stay low thereafter. To test these predictions, we link administrative registers to data on job search behavior from a major online job search platform in France. We follow over 400,000 workers, as long as they remain unemployed. We analyze the changes in search behavior around benefits exhaustion, and take two steps to isolate the individual response to unemployment benefits. First, our longitudinal data allows us to correct for changes in sample composition over the spell. Second, we exploit data on workers eligible for 12–24 months of UI as well as workers ineligible for UI, to control for behavior changes over the unemployment spell that are independent of UI. Our results confirm the predictions of search models. We find that search effort (the number of job applications) increases by at least 50% during the year preceding benefits exhaustion and remains high thereafter. The target monthly wage decreases by at least 2.4% during the year preceding benefits exhaustion, and remains low thereafter. Additionally, we provide evidence for duration dependence: workers decrease the wage they target by 1.5% over each year of unemployment, irrespective of their UI status.

Who helps the unemployed? Workers’ receipt of public and private transfers

I use longitudinal data from the Panel Study of Income Dynamics (PSID) to measure the extent to which an unemployment spell increases the likelihood that a worker receives a cash transfer from family. I examine the prevalence of cash transfers from family, the demographic distribution of unemployed receivers, and the variation between family supported and not family supported spells. I further investigate how this informal, private assistance relates to public transfers from Unemployment Insurance using state-by-year variation in the UI program. I find that unemployment increases the probability a worker receives financial assistance from their family, inclusive of all demographic subgroups, that family cash transfer receipt is growing over time, and is weakly related to UI availability.

The Optimal Timing of Unemployment Benefits: Theory and Evidence from Sweden

This paper provides a simple, yet robust framework to evaluate the time profile of benefits paid during an unemployment spell. We derive sufficient-statistics formulae capturing the marginal insurance value and incentive costs of unemployment benefits paid at different times during a spell. Our approach allows us to revisit separate arguments for inclining or declining profiles put forward in the theoretical literature and to identify welfare-improving changes in the benefit profile that account for all relevant arguments jointly. For the empirical implementation, we use administrative data on unemployment, linked to data on consumption, income, and wealth in Sweden. First, we exploit duration-dependent kinks in the replacement rate and find that, if anything, the moral hazard cost of benefits is larger when paid earlier in the spell. Second, we find that the drop in consumption affecting the insurance value of benefits is large from the start of the spell, but further increases throughout the spell. In trading off insurance and incentives, our analysis suggests that the flat benefit profile in Sweden has been too generous overall. However, both from the insurance and the incentives side, we find no evidence to support the introduction of a declining tilt in the profile. (JEL D82, E21, E24, J64, J65)

Unemployment duration tables

The purpose of the article is to construct the registered unemployment duration table. The table is a non-parametric model (also called a tabular model) showing the duration of a given phenomenon. In demography it is most often used as a life (or mortality) table. We will construct the cohort tables on the basis of individual data provided by the Poviat Labour Office in Szczecin. The cohort will consist of unemployed individuals registered in 2012 and observed by the end of 2013. The event regarded as the one ending the unemployment spell will be the moment of an individual’s de-registration from the PLO due to finding employment. The remaining data have been considered censored. One of the elements of the table is hazard intensity. We will compare the intensities of unemployment exits in the cohort subgroups.

Educational mismatch and unemployment scarring

Purpose – The purpose of this paper is to investigate educational mismatch and its interrelationships with unemployment duration. Design/methodology/approach – The authors study unemployment histories of Italian workers using dependent competing risk models. The authors evaluate the impact of overeducation on wage using propensity score and treatment models. Findings – The authors show that overeducated have longer unemployment spells than their well-matched peers. This evidence implies that when assessing the impact of overeducation on wages, the duration of joblessness should be taken into account to evaluate possible additional unemployment scarring effects. The authors show that when controlling for unemployment spell duration the wage effect of overeducation significantly increases of about 7 percent. This result is supported by improvements in the sensitivity analysis. Originality/value – The findings are consistent with an interpretation of educational mismatch as a penalizing phenomenon in the individuals’ working life associated with long-term unemployment.