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Does an increase in unemployment income lead to longer unemployment spells? Evidence using Danish unemployment assistance data

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  • Ott Toomet

    (Department of Economics, University of Aarhus, Denmark)

Abstract

Danish unemployment assistance depends on age; it increases by 70% when unemployed individuals turn 25. This feature is used to identify the impact of income on the unemployment-to-employment hazard rate. A mixed proportional hazard framework based on a 10% representative Danish registry data set is used. The results indicate that the income effect for females is negative and significant, corresponding to an income elasticity of -0.4. The effect for males is positive but insignifcant.

Suggested Citation

  • Ott Toomet, 2005. "Does an increase in unemployment income lead to longer unemployment spells? Evidence using Danish unemployment assistance data," Economics Working Papers 2005-07, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2005-07
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    File URL: https://repec.econ.au.dk/repec/afn/wp/05/wp05_07.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ott Toomet, 2008. "Threat Effect Of The Labour Market Programs In Denmark: Evidence From A Quasi-Experiment," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 62, Faculty of Economics and Business Administration, University of Tartu (Estonia).

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    More about this item

    Keywords

    welfare benefts; incentive effect; unemployment duration;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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