Does unemployment benefit duration affect inflows into unemployment? The impact of a law change for older workers

This article examines whether changes in the potential duration of unemployment benefits influence the entry of older workers into unemployment insurance. The analysis is based on a law change to the benefit rules which occurred in Spain in July 2012, when the eligible age for an extended benefit to older workers was raised from 52 to 55, and on data from the administrative records of the Spanish Public Employment Service. We analyse empirically the changes in the age pattern of inflows intro unemployment insurance before and after the reform, on the one hand, and the effect of the legal change on the age at the date of unemployment benefit admission, on the other hand. Our findings suggest that reducing the potential benefits duration affects the pattern of admissions, transferring entries to higher ages, and that the age at which older workers begin to receive unemployment insurance benefits increases by between one and three months for certain categories of workers.