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Does extended unemployment benefit duration ameliorate the negative employment effects of job loss?

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  • Fackler, Daniel
  • Stegmaier, Jens
  • Weigt, Eva

Abstract

We study the effect of job displacement due to bankruptcies on earnings and employment prospects of displaced workers and analyse whether extended potential unemployment benefit duration (PBD) ameliorates the negative consequences of job loss. Using German administrative linked employer-employee data, we find that job loss has long-lasting negative effects on earnings and employment. Displaced workers also more often end up in irregular employment relationships (part-time, marginal part-time employment, and temporary agency work) than their non-displaced counterparts. Applying a regression discontinuity approach that exploits a three months PBD extension at the age threshold of 50 we find hardly any effects of longer PBD on labour market outcomes of displaced workers.

Suggested Citation

  • Fackler, Daniel & Stegmaier, Jens & Weigt, Eva, 2019. "Does extended unemployment benefit duration ameliorate the negative employment effects of job loss?," Labour Economics, Elsevier, vol. 59(C), pages 123-138.
    • Handle: RePEc:eee:labeco:v:59:y:2019:i:c:p:123-138
    DOI: 10.1016/j.labeco.2019.03.001
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    Cited by:

    1. Fackler, Daniel & Stegmaier, Jens & Upward, Richard, 2023. "Safety net or helping hand? The effect of job search assistance and compensation on displaced workers," IWH Discussion Papers 18/2023, Halle Institute for Economic Research (IWH).
    2. Antoni, Manfred & Fackler, Daniel & Hank, Eva & Stegmaier, Jens, 2018. "Insolvenzen in Deutschland: Deutliche Spuren in den Biografien der Beschäftigten (Bankruptcies in Germany: Significant scars in workers' biographies)," IAB-Kurzbericht 201805, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Woodcock, Simon D., 2023. "The determinants of displaced workers’ wages: Sorting, matching, selection, and the Hartz reforms," Journal of Econometrics, Elsevier, vol. 233(2), pages 568-595.
    4. Marta C. Lopes, 2022. "A review on the elasticity of unemployment duration to the potential duration of unemployment benefits," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1212-1224, September.
    5. Daniel Fackler & Eva Weigt, 2020. "Who Buffers Income Losses after Job Displacement? The Role of Alternative Income Sources, the Family, and the State," LABOUR, CEIS, vol. 34(3), pages 239-276, September.

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    More about this item

    Keywords

    Job displacement; Unemployment benefit duration; Earnings losses; Irregular work arrangements; Linked employer-employee data;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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