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Do Benefit Cuts Boost Job Finding? Swedish Evidence from the 1990s

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  • Carling, Kenneth
  • Holmlund, Bertil
  • Vejsiu, Altin

Abstract

In June 1995, the Swedish parliament decided to cut the replacement rate in unemployment insurance from 80% to 75%, a change that took effect on 1 January 1996. The paper exploits a quasi-experimental feature of the benefit reform to examine the effect on job finding. We compare the evolution of transitions to employment before and after the reform among those affected and those not affected. Our estimates suggest that the reform caused an increase in the transition rate of roughly 10%. Moreover, the reform appears to have affected behaviour several months before its actual implementation in January 1996.

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Bibliographic Info

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 111 (2001)
Issue (Month): 474 (October)
Pages: 766-90

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Handle: RePEc:ecj:econjl:v:111:y:2001:i:474:p:766-90

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References

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  1. Abbring, Jaap H. & Berg, Gerard J. van den & Ours, Jan C. van, 1996. "The effect of unemployment insurance sanctions on the transition rate from unemployment to employment," Serie Research Memoranda 0038, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  2. Carling, Kenneth & Edin, Per-Anders & Harkman, Anders & Holmlund, Bertil, 1996. "Unemployment duration, unemployment benefits, and labor market programs in Sweden," Journal of Public Economics, Elsevier, vol. 59(3), pages 313-334, March.
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  1. Unemployment benefit reduces work even in recessions
    by Tino in Super-Economy on 2010-03-01 03:18:00
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