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The effect of receiving supplementary UI benefits on unemployment duration

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  • Tomi Kyyrä
  • Pierpaolo Parrotta
  • Michael Rosholm

Abstract

We consider the consequences of working part-time on supplementary unemployment insurance benefits in the Danish labour market. Following the ?timing-of-events? approach we estimate causal effects of subsidized part-time work on the hazard rate out of unemployment insurance benefit receipt. We find evidence of a negative lock-in effect and a positive post-treatment effect, both of which vary across individuals. The resulting net effect on the expected unemployment duration is positive for some groups (e.g. married women) and negative for others (e.g. young workers).

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Bibliographic Info

Paper provided by Government Institute for Economic Research Finland (VATT) in its series Working Papers with number 1.

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Date of creation: 23 Feb 2009
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Handle: RePEc:fer:wpaper:1

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Keywords: Unemployment benefits; part-time work; lock-in effect; treatment effect; duration analysis;

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References

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  1. Gaure, Simen & Roed, Knut & Zhang, Tao, 2007. "Time and causality: A Monte Carlo assessment of the timing-of-events approach," Journal of Econometrics, Elsevier, vol. 141(2), pages 1159-1195, December.
  2. Tomi Kyyrä, 2008. "Partial Unemployment Insurance Benefits and the Transition Rate to Regular Work," Discussion Papers 440, Government Institute for Economic Research Finland (VATT).
  3. Marloes de Graaf-Zijl & Gerard van den Berg & Arjan Heyma, 2011. "Stepping stones for the unemployed: the effect of temporary jobs on the duration until (regular) work," Journal of Population Economics, Springer, vol. 24(1), pages 107-139, January.
  4. Ek Spector, Susanne & Holmlund, Bertil, 2011. "Part-Time Unemployment and Optimal Unemployment Insurance," IZA Discussion Papers 5540, Institute for the Study of Labor (IZA).
  5. David H. Autor & Susan N. Houseman, 2010. "Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from "Work First"," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 96-128, July.
  6. Peter R. Mueser & Carolyn J. Heinrich & Kenneth Troske, 2003. "Welfare to Temporary Work: Implications for Labor Market Outcomes," Working Papers 0308, Department of Economics, University of Missouri.
  7. Michael Svarer, 2007. "The Effect of Sanctions on the Job Finding Rate: Evidence from Denmark," Economics Working Papers 2007-10, School of Economics and Management, University of Aarhus.
  8. Alison L Booth & Juan J. Dolado & Jeff Frank, 2002. "Symposium On Temporary Work Introduction," Economic Journal, Royal Economic Society, vol. 112(480), pages F181-F188, June.
  9. McCall, Brian P, 1997. "The Determinants of Full-Time versus Part-Time Reemployment Following Job Displacement," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 714-34, October.
  10. Bart COCKX & Matteo PICCHIO, 2009. "Are Short-Lived Jobs Stepping Stones to Long-Lasting Jobs ?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2009004, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  11. Neugart, Michael & Storrie, Donald, 2002. "Temporary work agencies and equilibrium unemployment," Working Papers in Economics 83, University of Gothenburg, Department of Economics.
  12. Jahn, Elke J. & Rosholm, Michael, 2010. "Looking beyond the bridge: How temporary agency employment affects labor market outcomes," IAB Discussion Paper 201009, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  13. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The Nonparametric Identification of Treatment Effects in Duration Models," Econometrica, Econometric Society, vol. 71(5), pages 1491-1517, 09.
  14. McCall, B.P., 1993. "Unemployment Insurance Rules, Joblessness, and Part-Time Work," Papers 93-07, Minnesota - Industrial Relations Center.
  15. Staghøj, Jonas & Svarer, Michael & Rosholm, Michael, 2007. "A Statistical Programme Assignment Model," IZA Discussion Papers 3165, Institute for the Study of Labor (IZA).
  16. Erling Rasmussen & Jens Lind & Jelle Visser, 2004. "Divergence in Part-Time Work in New Zealand, the Netherlands and Denmark," British Journal of Industrial Relations, London School of Economics, vol. 42(4), pages 637-658, December.
  17. Brinch, Christian N., 2007. "Nonparametric Identification Of The Mixed Hazards Model With Time-Varying Covariates," Econometric Theory, Cambridge University Press, vol. 23(02), pages 349-354, April.
  18. Rosholm, Michael, 2008. "Experimental Evidence on the Nature of the Danish Employment Miracle," IZA Discussion Papers 3620, Institute for the Study of Labor (IZA).
  19. Laura Hartman & Linus Liljeberg & Oskar Skans, 2010. "Stepping-stones, dead-ends, or both? An analysis of Swedish replacement contracts," Empirical Economics, Springer, vol. 38(3), pages 645-668, June.
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Citations

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Cited by:
  1. Ek, Susanne & Holmlund, Bertil, 2011. "Part-Time Unemployment and Optimal Unemployment Insurance," Working Paper Series 2011:4, Uppsala University, Department of Economics.
  2. Bart Cockx & Christian Goebel & Stéphane Robin, 2013. "Can income support for part-time workers serve as a stepping-stone to regular jobs? An application to young long-term unemployed women," Empirical Economics, Springer, vol. 44(1), pages 189-229, February.
  3. Jahn, Elke J. & Rosholm, Michael, 2014. "Looking beyond the bridge: The effect of temporary agency employment on labor market outcomes," European Economic Review, Elsevier, vol. 65(C), pages 108-125.
  4. Jahn, Elke J. & Rosholm, Michael, 2010. "Looking Beyond the Bridge: How Temporary Agency Employment Affects Labor Market Outcomes," IZA Discussion Papers 4973, Institute for the Study of Labor (IZA).
  5. Godoy, Anna & Røed, Knut, 2014. "Unemployment Insurance and Underemployment," IZA Discussion Papers 7913, Institute for the Study of Labor (IZA).
  6. Marco Caliendo & Steffen Künn & Arne Uhlendorff, 2012. "Marginal Employment, Unemployment Duration and Job Match Quality," Discussion Papers of DIW Berlin 1222, DIW Berlin, German Institute for Economic Research.
  7. Florent Fremigacciy & Antoine Terracol, 2009. "Subsidized temporary jobs: lock-in and stepping stone effects," Documents de recherche 09-10, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
  8. B. Cockx & C. Goebel & S. Robin, 2009. "Is income support for part-time workers a steppingstone to regular jobs? An application to young long-term unemployed women," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/561, Ghent University, Faculty of Economics and Business Administration.

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