The Effects of Unemployment Assistance on Unemployment Exits
Kyyrä, Tomi (2021-03-19)
Valtion taloudellinen tutkimuskeskus
Julkaisun pysyvä osoite on
Many countries have a two-tiered unemployment compensation system which provides earnings-related unemployment insurance for a limited period of time and less generous unemployment assistance thereafter. This study evaluates the effects of a reform in Finland that increased the level of unemployment assistance by 22%. The reform led to a drop of 9% in the unemployment exit hazard, which can be attributed to fewer exits to both employment and inactivity. The implied elasticities suggest that a 10% increase in unemployment assistance reduces the unemployment exit hazard by 4% and the job finding hazard by 6%. These effects are relatively small compared to the existing evidence on the effects of unemployment insurance benefits.
Social security, taxation and inequality, Labour markets and education
unemployment assistance, labor market subsidy, hazard rate, unemployment duration
- VATT Working Papers