Unemployment Insurance Schemes, Liquidity Constraints and Re-employment: A Three Country Comparison
AbstractWe examine how unemployment schemes and liquidity constraints affect re-employment probabilities trying to assess whether these schemes, through employment services and search requirements, can offset the perverse effect of benefits on unemployment duration. Similarly, given that liquidity constraints and financial pressure also affect reservation wage and search effort, we analyze whether better economic conditions of individuals increase duration. We perform a survival analysis on Finland, Italy and Poland and we find that unemployment insurance schemes have a mixed effect: initially they give incentives to increase search effort but with time they simply reduce liquidity constraints and thus increase duration. We also find that individuals’ liquidity constraints reduce unemployment duration in Italy and Poland but not Finland, suggesting that this aspect is less important in countries with a more developed welfare system.
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Comparative Economic Studies.
Volume (Year): 54 (2012)
Issue (Month): 2 (June)
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Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
Other versions of this item:
- Corsini, Lorenzo, 2012. "Unemployment Insurance Schemes, Liquidity Constraints and Re-employment: a three Country Comparison," MPRA Paper 36572, University Library of Munich, Germany.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
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