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The impact of varying penalty values on compliance with unemployment payment requirements: An analysis using 2015/16 Australian National Data

Author

Listed:
  • Andrew Wright

    (University of New England)

  • Brian Dollery

    (University of New England)

Abstract

Existing empirical research on unemployment payment schemes has demonstrated that financial penalties affect unemployment payment recipients’ behaviour. However, limited empirical work exists on the effects of varying penalty values as well as compliance with requirements (as opposed to employment outcomes). In order to address this gap in the literature, this paper examines the extent to which higher-value penalties enhance unemployment payment recipients’ compliance with requirements. It does this using a natural experiment under Australian administrative rules, whereby identical recipients can face penalties varying in value by 100 per cent. Those receiving larger penalties were found to be significantly more likely to comply with requirements compared to those receiving smaller penalties. However, contrary to expectations, no evidence was found supporting earlier evidence that women respond more strongly to penalties than men.

Suggested Citation

  • Andrew Wright & Brian Dollery, 2020. "The impact of varying penalty values on compliance with unemployment payment requirements: An analysis using 2015/16 Australian National Data," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 23(1), pages 1-20.
    • Handle: RePEc:ozl:journl:v:23:y:2020:i:1:p:1-20
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    compliance; financial penalties; unemployment assistance; welfare policy;
    All these keywords.

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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