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An extra time duration model with application to unemployment duration under benefits in Spain

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Abstract

This paper postulates that the effect of unemployment benefits on the hazard rates changes considerably using a traditional duration model that uses only unemployment insurance (UI) data, or deals with unemployment assistance (UA) as a mere extension of UI, instead of an extra time duration model that accounts separately for transition rates to work of the unemployed who receive UI and UA. For UI recipients the hazard rate rises dramatically when UI benefits lapse approaches. On the contrary, for UA recipients the hazard rate remains flat or even has a slight fall nearby the UA lapse. Finally, there is a group of unemployed qualified for UA that quit UI due to the income fall that they will experience when they pass from UI to UA.

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  • 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.
    • Handle: RePEc:cea:doctra:e2003_38
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    1. Trine Filges & Anders Bruun Jonassen & Anne‐Marie Klint Jørgensen, 2018. "Reducing unemployment benefit duration to increase job finding rates: a systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 14(1), pages 1-194.
    2. Yolanda Rebollo-Sanz & J. García-Pérez, 2015. "Are unemployment benefits harmful to the stability of working careers? The case of Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 6(1), pages 1-41, March.
    3. Trine Filges & Lars Pico Geerdsen & Anne‐Sofie Due Knudsen & Anne‐Marie Klint Jørgensen & Krystyna Kowalski, 2013. "Unemployment Benefit Exhaustion: Incentive Effects on Job Finding Rates: A Systematic Review," Campbell Systematic Reviews, John Wiley & Sons, vol. 9(1), pages 1-104.
    4. Ayala, Luis & Rodriguez, Magdalena, 2007. "Barriers to employment and welfare dynamics: Evidence from Spain," Journal of Policy Modeling, Elsevier, vol. 29(2), pages 237-257.
    5. Labeaga, José M. & Molina, José Alberto & Navarro, María, 2011. "Deprivation using satisfaction measures in Spain: An evaluation of unemployment benefits," Journal of Policy Modeling, Elsevier, vol. 33(2), pages 287-310, March.
    6. Darja Borsic & Alenka Kavkler, 2009. "Duration of Regional Unemployment Spells in Slovenia," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 7(2), pages 123-146.

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    More about this item

    Keywords

    unemployment benefits mixed proportional hazard model; unobserved heterogeneity;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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