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The effects of reducing the entitlement period to unemployment insurance benefits

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  • de Groot, Nynke
  • van der Klaauw, Bas

Abstract

This paper uses a difference-in-differences approach exploiting a substantial reform of the Dutch unemployment insurance law and a regression discontinuity design based on policy discontinuities prior to the reform to study the effects of the benefits entitlement period on job finding and subsequent labor market outcomes. Using detailed administrative data covering the full population, both identification strategies show that reducing the entitlement period increases the job finding rate. We find mixed results for the quality of the job-worker match, which we attribute to differences in the time period and the group of affected unemployed workers. However, all our estimation results show that a shorter benefits entitlement period substantially increases cumulative earnings. These increases in earnings are larger than the cumulative reduction in benefits payments.

Suggested Citation

  • de Groot, Nynke & van der Klaauw, Bas, 2019. "The effects of reducing the entitlement period to unemployment insurance benefits," Labour Economics, Elsevier, vol. 57(C), pages 195-208.
    • Handle: RePEc:eee:labeco:v:57:y:2019:i:c:p:195-208
    DOI: 10.1016/j.labeco.2019.02.003
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    Cited by:

    1. Galecka-Burdziak, Ewa & Góra, Marek & Jessen, Jonas & Jessen, Robin & Kluve, Jochen, 2021. "The Effects of Shortening Potential Benefit Duration: Evidence from Regional Cut-Offs and a Policy Reform," IZA Discussion Papers 14340, Institute of Labor Economics (IZA).
    2. Cockx, Bart & Declercq, Koen & Dejemeppe, Muriel & Inga, Leda & Van der Linden, Bruno, 2020. "Switching from an inclining to a zero-level unemployment benefit profile: Good for work incentives?," Labour Economics, Elsevier, vol. 64(C).
    3. Atav, Tilbe & Jongen, Egbert L. W. & Rabat, Simon, 2021. "Increasing the Effective Retirement Age: Key Factors and Interaction Effects," IZA Discussion Papers 14150, Institute of Labor Economics (IZA).
    4. Lichter, Andreas & Schiprowski, Amelie, 2021. "Benefit duration, job search behavior and re-employment," Journal of Public Economics, Elsevier, vol. 193(C).
    5. Jessen, Jonas & Jessen, Robin & Galecka-Burdziak, Ewa & Góra, Marek & Kluve, Jochen, 2023. "The Micro and Macro Effects of Changes in the Potential Benefit Duration," IZA Discussion Papers 15978, Institute of Labor Economics (IZA).
    6. Mari, Gabriele & Keizer, Renske & van Gaalen, Ruben, 2022. "The Timing of Parental Unemployment, Insurance, and Children's Education," SocArXiv 7rm6g, Center for Open Science.
    7. Paul Muller & Bas van der Klaauw & Arjan Heyma, 2020. "Comparing econometric methods to empirically evaluate activation programs for job seekers," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 35(5), pages 526-547, August.
    8. Egbert Jongen & Simon Rabaté & Tilbe Atav, 2019. "The effects of the increase in the retirement age in the Netherlands," CPB Discussion Paper 408, CPB Netherlands Bureau for Economic Policy Analysis.
    9. Stephen Kastoryano & Bas van der Klaauw, 2022. "Dynamic evaluation of job search assistance," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 37(2), pages 227-241, March.
    10. Márton Csilalg & Ágota Scharle & Balázs Munkácsy, 2023. "Evaluating the effect of a drastic cut in unemployment benefit duration on re-employment and wages of jobseekers," CERS-IE WORKING PAPERS 2326, Institute of Economics, Centre for Economic and Regional Studies.
    11. Egbert Jongen & Simon Rabaté & Tilbe Atav, 2019. "The effects of the increase in the retirement age in the Netherlands," CPB Discussion Paper 408.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    12. Rutten, Albert, 2023. "Essays on work and retirement," Other publications TiSEM 078adee5-770b-417b-b7c1-a, Tilburg University, School of Economics and Management.

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    More about this item

    Keywords

    Unemployment benefits entitlement; Job finding; Job quality; Difference-in-differences; Regression discontinuity;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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