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Intergenerational Influences on the Receipt of Unemployment Insurance in Canada and Sweden

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Author Info

  • Corak, Miles

    ()
    (University of Ottawa)

  • Gustafsson, Björn Anders

    ()
    (University of Gothenburg)

  • Österberg, Torun

    ()
    (University of Gothenburg)

Abstract

The objective of this paper is to examine the extent to which an individual’s use of unemployment insurance (UI) as a young adult is influenced by past experience with the program, and by having had a parent who also collected UI. A major methodological challenge is to determine the extent to which the intergenerational correlation of UI status is "spurious" or causal. Both the time to a first UI claim and the entire sequence of claims over an extended period are examined using two alternative ways of controlling for unobserved heterogeneity. The analysis is based upon longitudinal data on a cohort of young Canadian and Swedish men. It is found that parental use of UI shortens the time to a first UI claim in Canada, but not in Sweden. Subsequent participation in the Canadian program is influenced by parental UI history. In Sweden individual learning through past participation in UI - not family background - is the dominant avenue determining repeated participation.

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File URL: http://ftp.iza.org/dp184.pdf
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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 184.

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Length: 64 pages
Date of creation: Aug 2000
Date of revision:
Publication status: published in: Miles Corak (ed.), Generational Income Mobility in North America and Europe. Cambridge University Press 2004
Handle: RePEc:iza:izadps:dp184

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Keywords: Unemployment insurance; intergenerational mobility; unemployment;

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References

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  1. Miles Corak, 1993. "Is unemployment insurance addictive? Evidence from the benefit durations of repeat users," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(1), pages 62-72, October.
  2. Miles Corak & Andrew Heisz, 1999. "The Intergenerational Earnings and Income Mobility of Canadian Men: Evidence from Longitudinal Income Tax Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 504-533.
  3. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
  4. Peter Gottschalk, 1993. "Is The Correlation In Welfare Participation Across Generations Spurious?," Boston College Working Papers in Economics 224, Boston College Department of Economics.
  5. Becker, Gary S & Mulligan, Casey B, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 729-58, August.
  6. Lars Ljungqvist & Thomas J. Sargent, 1996. "The European Unemployment Dilemma," EUI-RSCAS Working Papers 36, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
  7. Allison, G. & Fudenberg, D., 1992. "Rules of Thumb for Social Learning," Working papers 92-12, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. Fudenberg, Drew & Ellison, Glenn, 1995. "Word-of-Mouth Communication and Social Learning," Scholarly Articles 3196300, Harvard University Department of Economics.
  9. Antel, John J, 1992. "The Intergenerational Transfer of Welfare Dependency: Some Statistical Evidence," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 467-73, August.
  10. Björklund, Anders & Holmlund, Bertil, 1986. "The Economics of Unemployment Insurance: The Case of Sweden," Working Paper Series 167, Research Institute of Industrial Economics.
  11. Bruce D. Meyer & Dan T. Rosenbaum, 1996. "Repeat Use of Unemployment Insurance," NBER Working Papers 5423, National Bureau of Economic Research, Inc.
  12. Lindbeck, Assar, 1995. "Hazardous Welfare-State Dynamics," Working Paper Series 428, Research Institute of Industrial Economics.
  13. Thomas Lemieux & W. Bentley MacLeod, 1998. "Supply Side Hysterisis: The Case of the Canadian Unemployment InsuranceSystem," NBER Working Papers 6732, National Bureau of Economic Research, Inc.
  14. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  15. Donal O'Neill; & Olive Sweetman, 1997. "Intergenerational Mobility in Britain: Evidence from unemployment patterns," Economics, Finance and Accounting Department Working Paper Series n730997, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  16. Heckman, James J & Borjas, George J, 1980. "Does Unemployment Cause Future Unemployment? Definitions, Questions and Answers from a Continuous Time Model of Heterogeneity and State Dependence," Economica, London School of Economics and Political Science, vol. 47(187), pages 247-83, August.
  17. Patricia M. Anderson & Bruce D. Meyer, 1993. "The Unemployment Insurance Payroll Tax and Interindustry and Interfirm Subsidies," NBER Chapters, in: Tax Policy and the Economy, Volume 7, pages 111-144 National Bureau of Economic Research, Inc.
  18. P. B. Levine & D. J. Zimmerman, . "The intergenerational correlation in AFDC participation: Welfare trap or poverty trap?," Institute for Research on Poverty Discussion Papers 1100-96, University of Wisconsin Institute for Research on Poverty.
  19. Lindbeck, Assar, 1995. "Hazardous Welfare-State Dynamics," American Economic Review, American Economic Association, vol. 85(2), pages 9-15, May.
  20. Sara McLanahan, 1988. "Family structure and dependency: Early transitions to female household headship," Demography, Springer, vol. 25(1), pages 1-16, February.
  21. Thomas Dunn & Douglas Holtz-Eakin, 1996. "Financial Capital, Human Capital, and the Transition to Self-Employment:Evidence from Intergenerational Links," NBER Working Papers 5622, National Bureau of Economic Research, Inc.
  22. Miles Corak, 1993. "Unemployment Insurance Once Again: The Incidence of Repeat Participation in the Canadian UI Program," Canadian Public Policy, University of Toronto Press, vol. 19(2), pages 162-176, June.
  23. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
  24. O'Neill, Donal & Sweetman, Olive, 1998. "Intergenerational Mobility in Britain: Evidence from Unemployment Patterns," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(4), pages 431-47, November.
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Citations

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Cited by:
  1. Baldwin, John R. & Peters, Valerie, 2001. "Training as a Human Resource Strategy: The Response to Staff Shortages and Technological Change," Analytical Studies Branch Research Paper Series 2001154e, Statistics Canada, Analytical Studies Branch.
  2. Andersson, Fredrik & Konrad, Kai A., 2001. "Globalization and Human Capital Formation," IZA Discussion Papers 245, Institute for the Study of Labor (IZA).
  3. Ekhaugen, Tyra, 2005. "Extracting the causal component from the intergenerational correlation in unemployment," Memorandum 21/2005, Oslo University, Department of Economics.
  4. Miles Corak, 2001. "Are the Kids All Right? Intergenerational Mobility and Child Well-being in Canada," The Review of Economic Performance and Social Progress, in: Andrew Sharpe, Executive Director & France St-Hilaire, Vice-President , Research & Keith Banting, Di (ed.), The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s, volume 1 Centre for the Study of Living Standards & The Institutute for Research on Public Policy.
  5. Grady, Patrick & Kapsalis, Constantine, 2002. "The Approach to Seasonal Unemployment in the Nordic Countries: A Comparison with Canada," MPRA Paper 2991, University Library of Munich, Germany.
  6. Orsetta Causa & Catherine Chapuis, 2009. "Equity in Student Achievement Across OECD Countries: An Investigation of the Role of Policies," OECD Economics Department Working Papers 708, OECD Publishing.

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