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Unemployment insurance and youth labor market entry

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  • von Buxhoeveden, Mathias

    (IFAU - Institute for Evaluation of Labour Market and Education Policy)

Abstract

This paper estimates the effects of unemployment insurance (UI) benefits on job finding rates and entry level wages for unemployed high school leavers. Up to year 2007, Swedish high school-students who became unemployed shortly after graduation were entitled to UI-benefits once they became 20 years of age. Therefore, the start of an unemployment spell relative to the 20:th birthday creates potentially exogenous variation in time to treatment. I exploit this to estimate the effect of UI benefits on unemployment duration and entry level wages. The results show that there is a large and statistically significant negative effect of UI benefits on the employment hazard. There are no detectable effects on entry level wages. This would suggest that unemployment benefits induce high school leavers to postpone labor market entry but does not seem to effect job match quality.

Suggested Citation

  • von Buxhoeveden, Mathias, 2019. "Unemployment insurance and youth labor market entry," Working Paper Series 2019:12, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    • Handle: RePEc:hhs:ifauwp:2019_012
    Note: Read WP 2019:12 here: https://www.ifau.se/globalassets/pdf/se/2019/wp-2019-12-unemployment-insurance-and-youth-labor-market-entry.pdf
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    References listed on IDEAS

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    1. Francis Kramarz & Oskar Nordström Skans, 2014. "When Strong Ties are Strong: Networks and Youth Labour Market Entry," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(3), pages 1164-1200.
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    8. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-694, July.
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    Cited by:

    1. Cockx, B. & Declercq, Koen & Dejemeppe, Muriel, 2022. "Losing prospective entitlement to unemployment benefits. Impact on educational attainment," ROA Research Memorandum 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).

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    More about this item

    Keywords

    youth; unemployment; insurance; labor; market; entry;
    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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