Unemployment Duration and the Interactions Between Unemployment Insurance and Social Assistance

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Unemployment Duration and the Interactions Between Unemployment Insurance and Social Assistance

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Michele Pellizzari

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Michele Pellizzari

Abstract

The existing studies of unemployment benefit and unemployment duration suggest that reforms that lower either the level or the duration of benefits should reduce unemployment. Despite the large number of such reforms implemented in Europe in the past decades, this paper presents evidence that shows no correlation between the reforms and the evolution of unemployment. This paper also provides an explanation for this fact by exploring the interactions between unemployment benefits and social assistance programmes. Unemployed workers who are also eligible, or expect to become eligible, for some social assistance programmes are less concerned about their benefits being reduced or terminated. They will not search particularly intensively around the time of benefit exhaustion nor will come particularly less choosy about job offers by reducing their reservation wages. Data from the European Community Household Panel (ECHP) are used to provide evidence to support this argument. Results show that, in fact, for social assistance recipients the probability of finding a job is not particularly higher during the last months of entitlement.

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Paper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 272.

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Date of creation: 2004
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Handle: RePEc:igi:igierp:272

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Article
- Pellizzari, Michele, 2006. "Unemployment duration and the interactions between unemployment insurance and social assistance," Labour Economics, Elsevier, vol. 13(6), pages 773-798, December. [Downloadable!] (restricted)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Javier Ortega & Laurence Rioux, 2007. "On the Extent of Re-Entitlement Effects in Unemployment Compensation," IZA Discussion Papers 2807, Institute for the Study of Labor (IZA). [Downloadable!]
Other versions:
- Ortega, Javier & Rioux, Laurence, 2006. "On the Extent of Re-Entitlement Effects in Unemployment Compensation," CEPR Discussion Papers 5826, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Javier Ortega & Laurence Rioux, 2008. "On the Extent of Re-Entitlement Effects in Unemployment Compensation," CEP Discussion Papers dp0846, Centre for Economic Performance, LSE. [Downloadable!]
David Card & Raj Chetty & Andrea Weber, 2007. "The Spike at Benefit Exhaustion: Leaving the Unemployment System or Starting a New Job?," IZA Discussion Papers 2590, Institute for the Study of Labor (IZA). [Downloadable!]
Other versions:
- David Card & Raj Chetty & Andrea Weber, 2007. "The Spike at Benefit Exhaustion: Leaving the Unemployment System or Starting a New Job?," NBER Working Papers 12893, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
- David Card & Raj Chetty & Andrea Weber, 2007. "The Spike at Benefit Exhaustion: Leaving the Unemployment System or Starting a New Job?," American Economic Review, American Economic Association, vol. 97(2), pages 113-118, May. [Downloadable!]
Christian Schmitt, 2008. "Gender-Specific Effects of Unemployment on Family Formation: A Cross-National Perspective," SOEPpapers 127, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
Other versions:
- Christian Schmitt, 2008. "Gender-Specific Effects of Unemployment on Family Formation: A Cross-National Perspective," Discussion Papers of DIW Berlin 841, DIW Berlin, German Institute for Economic Research. [Downloadable!]

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