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Examining the Effects of Zero‐Dollar Unemployment Payment Sanctions

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  • Andrew Wright
  • Brian Dollery
  • Michael Kortt
  • Shawn Leu

Abstract

Existing evidence has demonstrated that sanctions affect unemployment payment recipients’ behaviour. However, in addition to financial impacts, sanction application includes administrative processes. This study examines a feature of Australian unemployment benefits, whereby jobseekers not meeting requirements may face a zero‐dollar sanction (termed suspension). The results indicate a strong behavioural response, with previously suspended jobseekers 13.1 percentage points more likely to attend their next appointment. Further, ongoing behavioural change was observed, even for jobseekers with a history of previous non‐compliance. This suggests temporary payment suspension and associated administrative processes are effective at securing behavioural change, without the need for lasting financial impact.

Suggested Citation

  • Andrew Wright & Brian Dollery & Michael Kortt & Shawn Leu, 2020. "Examining the Effects of Zero‐Dollar Unemployment Payment Sanctions," The Economic Record, The Economic Society of Australia, vol. 96(315), pages 490-505, December.
    • Handle: RePEc:bla:ecorec:v:96:y:2020:i:315:p:490-505
    DOI: 10.1111/1475-4932.12566
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