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Work incentive and other effects of social assistance and unemployment benefit policy in the Czech Republic

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Author Info

  • Katherine Terrell

    ()
    (CERGE-EI, Politickych Veznu 7, CZ-11121 Prague, Czech Republic)

  • Michaela Erbenova

    ()
    (CERGE-EI, Politickych Veznu 7, CZ-11121 Prague, Czech Republic)

  • Vit Sorm

    ()
    (CERGE-EI, Politickych Veznu 7, CZ-11121 Prague, Czech Republic)

Abstract

In this paper we provide an account of most of the passive labor market policies (unemployment compensation, social assistance, state social support and the pension system) in the Czech Republic during the 1990-1996 period. The eligibility requirements and benefit levels are described in great detail. Using Labor Force Survey data, we compare the characteristics of unemployed people receiving unemployment benefits with those receiving social assistance and those not receiving any benefits and we find significant differences in their characteristics. Finally, we provide an analysis of the work disincentive effects of the unemployment and social assistance benefits by comparing these benefits to market wages and by analyzing the effect of being in the system on the duration of unemployment of two cohorts of unemployed in 1994 and 1995. We find that social assistance benefits are fairly generous for low income families with more children, individuals with these characteristics have a higher probability of receiving social assistance and they tend to stay unemployed longer than those people with relatively fewer dependants. We conclude that the social assistance scheme seems to be having some disincentive effects for at least one group in the population.

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Bibliographic Info

Article provided by Springer in its journal Empirical Economics.

Volume (Year): 23 (1998)
Issue (Month): 1/2 ()
Pages: 87-120

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Handle: RePEc:spr:empeco:v:23:y:1998:i:1/2:p:87-120

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Related research

Keywords: Czech Republic · passive labor market policies · unemployment duration;

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Cited by:
  1. Jan Svejnar, 1996. "Pensions in the Former Soviet Bloc: Problems and Solutions," William Davidson Institute Working Papers Series 14, William Davidson Institute at the University of Michigan.
  2. José María Arranz & Juan Muro Romero, 2003. "An extra time duration model with application to unemployment duration under benefits in Spain," Economic Working Papers at Centro de Estudios Andaluces E2003/38, Centro de Estudios Andaluces.
  3. Karoly Fazekas & Zsombor Cseres-Gergely & Agota Scharle (ed.), 2008. "The Hungarian Labour Market 2008," The Hungarian Labour Market Yearbooks, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences, number 2008, January.
  4. Ondřej Schneider & Tomáš Jelínek, 2005. "Distributive Impact of Czech Social Security and Tax Systems: Dynamics in Early 2000s," Prague Economic Papers, University of Economics, Prague, vol. 2005(3), pages 221-237.
  5. Alfonso Alba-Ramirez & Jose Maria Arranz Muñoz & Fernando Muñoz-Bullon, 2006. "Unemployment Duration, Unemployment Benefits And Recalls," Business Economics Working Papers wb066218, Universidad Carlos III, Departamento de Economía de la Empresa.

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