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Re-employment Rates of Older Unemployed Workers: Decomposing the Effect of Birth Cohorts and Policy Changes

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  • Pierre Koning

    ()

  • Max Raterink

    ()

Abstract

In many European countries, re-employment probabilities of older unemployed workers are relatively low. While there is evidence that financial incentives and search obligations are effective to increase the job prospects of older workers, recent research also stresses the importance of birth cohort effects. These cohort effects may in turn stem from higher educational attainment levels and better health conditions of future generations of older workers. This paper empirically assesses the relative importance of both explanations, using a registered data set of unemployment insurance spells between 1999 and 2008 for the Netherlands. Using a Linear Probability Model, we decompose the effects of birth cohorts, age, calendar time and two policy measures that were targeted at older unemployed workers—i.e. increased job search obligations in 2004 and shorter potential benefit durations (PBD) in 2006. We find that policy effects predominantly explain the increased job return rates of unemployed of 55 years and older from 1999 to 2008. The introduction of search requirements has increased the one-year re-employment probability of eligible older men with about 5 % point, while the reduction in PBD has caused the one-year re-employment probability of eligible men to increase with 3 % point. Copyright Springer Science+Business Media New York 2013

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File URL: http://hdl.handle.net/10.1007/s10645-013-9208-2
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Bibliographic Info

Article provided by Springer in its journal De Economist.

Volume (Year): 161 (2013)
Issue (Month): 3 (September)
Pages: 331-348

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Handle: RePEc:kap:decono:v:161:y:2013:i:3:p:331-348

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Web page: http://www.springerlink.com/link.asp?id=100260

Related research

Keywords: Older workers; Unemployment; Job search; Longitudinal data; J64; J65; C23;

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  1. Euwals, Rob & Knoef, Marike & van Vuuren, Daniel, 2007. "The Trend in Female Labour Force Participation: What Can Be Expected for the Future?," IZA Discussion Papers 3225, Institute for the Study of Labor (IZA).
  2. Deaton, A.S. & Paxson, C.H., 1992. "Saving, Growth, and Aging in Taiwan," Papers 161, Princeton, Woodrow Wilson School - Development Studies.
  3. Hullegie, P.G.J. & Ours, J.C. van, 2013. "Seek and Ye shall Find: How Search Requirements Affect Job Finding Rates of Older Workers," Discussion Paper 2013-028, Tilburg University, Center for Economic Research.
  4. Lammers, Marloes & Bloemen, Hans & Hochguertel, Stefan, 2013. "Job search requirements for older unemployed: Transitions to employment, early retirement and disability benefits," European Economic Review, Elsevier, vol. 58(C), pages 31-57.
  5. Hullegie, Patrick & van Ours, Jan C., 2013. "Seek and Ye Shall Find: How Search Requirements Affect Job Finding Rates of Older Workers," IZA Discussion Papers 7400, Institute for the Study of Labor (IZA).
  6. Lalive, Rafael, 2006. "How Do Extended Benefits Affect Unemployment Duration? A Regression Discontinuity Approach," IZA Discussion Papers 2200, Institute for the Study of Labor (IZA).
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