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Estimating the effects of potential benefit duration without variation in the maximum duration of unemployment benefits

Kyyrä, Tomi; Pesola, Hanna (2017-05-31)

 
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Kyyrä, Tomi
Pesola, Hanna
Valtion taloudellinen tutkimuskeskus
31.05.2017
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Julkaisun pysyvä osoite on
https://urn.fi/URN:ISBN:978-952-274-194-3

Kuvaus

nonPeerReviewed
Tiivistelmä
This paper examines the effects of unemployment benefit duration in Finland. To overcome the problem that the maximum duration of benefits is the same for all unemployed we exploit two observations. First, despite the uniform maximum benefit period, potential benefit duration at the beginning of unemployment spells varies across individuals because only those with sufficient work history in the past two years qualify for a new period of benefits whereas others may be entitled to unused benefit days from a previous spell. Second, part of this variation is exogenous due to a reform that reduced the minimum number of employment weeks required for the new benefit period. Using the exogenous part of the variation for identification we estimate that one extra week of benefits increases expected unemployment duration by 0.15 weeks, which corresponds to an elasticity of 0.5. We also find positive effects on the quality of the next job, especially when measured by job stability.

Tutkimusteema

Social security, taxation and inequality, Labour markets and education

JEL

J64, J65

Avainsanat

unemployment, unemployment benefit, unemployment duration, unemployment insurance
Kokoelmat
  • VATT Working Papers [155]

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    VATT Working Papers : 89 (Valtion taloudellinen tutkimuskeskus, 31.05.2017)
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    VATT Working Papers : 86 (Valtion taloudellinen tutkimuskeskus, 31.05.2017)
    Many studies have found that the exit rate from unemployment increases in the vicinity of the exhaustion day of unemployment insurance benefits. The extent to which this spike is driven by job search behavior is important ...

Valtion taloudellinen tutkimuskeskus VATT
www.vatt.fi
[email protected]
[email protected] | Yhteydenotto | Saavutettavuusseloste
 

 

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Valtion taloudellinen tutkimuskeskus VATT
www.vatt.fi
[email protected]
[email protected] | Yhteydenotto | Saavutettavuusseloste