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Base Period, Qualifying Period and the Equilibrium Rate of Unemployment

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  • Jahn, Elke J.

    ()
    (Institute for Employment Research (IAB), Nuremberg)

  • Wagner, Thomas

    ()
    (University of Applied Sciences Nuremberg)

Abstract

Unemployment benefits, benefit duration, base period and qualifying period are constituent parameters of the unemployment insurance system in most OECD countries. From economic research we know that the amount and duration of unemployment benefits increase unemployment. To analyze the effects of the other two parameters we use a matching model with search frictions and show that there is a trade-off between the qualifying and the base period on the one hand and the amount and duration of the unemployment benefits on the other. A country that combines a high level of unemployment benefits with a long benefit duration can neutralize the effect on the equilibrium rate of unemployment with a long qualifying and/or a short base period.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2151.

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Length: 45 pages
Date of creation: May 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2151

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Keywords: matching model; unemployment insurance; base period; qualifying period; labor market policy;

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References

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  1. Nickell, S. & Layard, R., 1997. "Labour Market Institutions and Economic Performance," Papers, Centre for Economic Performance & Institute of Economics 23, Centre for Economic Performance & Institute of Economics.
  2. 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.
  3. Barbara Petrongolo & Christopher Pissarides, 2000. "Looking into the black box: a survey of the matching function," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 2122, London School of Economics and Political Science, LSE Library.
  4. M. Andrews & L. Gill & R. Upward, 2006. "High wage workers and low wage firms: Negative assortative matching or statistical artefact?," The School of Economics Discussion Paper Series, Economics, The University of Manchester 0615, Economics, The University of Manchester.
  5. Mortensen, Dale T & Pissarides, Christopher A, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 61(3), pages 397-415, July.
  6. Dale T. Mortensen, 1977. "Unemployment insurance and job search decisions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 30(4), pages 505-517, July.
  7. Mortensen, Dale T & Pissarides, Christopher, 1999. "New Developments in Models of Search in the Labour Market," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2053, C.E.P.R. Discussion Papers.
  8. Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780198284345, October.
  9. Richard Rogerson & Robert Shimer & Randall Wright, 2004. "Search-Theoretic Models of the Labor Market-A Survey," NBER Working Papers 10655, National Bureau of Economic Research, Inc.
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Cited by:
  1. Hohendanner, Christian, 2007. "Verdrängen Ein-Euro-Jobs sozialversicherungspflichtige Beschäftigung in den Betrieben?," IAB Discussion Paper 200708, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Amend, Elke & Herbst, Patrick, 2008. "Labor market pooling and human capital investment decisions," IAB Discussion Paper 200804, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  3. Kruppe, Thomas, 2006. "Die Förderung beruflicher Weiterbildung : eine mikroökonometrische Evaluation der Ergänzung durch das ESF-BA-Programm," IAB Discussion Paper 200621, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  4. Eckey, Hans-Friedrich & Schwengler, Barbara & Türck, Matthias, 2007. "Vergleich von deutschen Arbeitsmarktregionen," IAB Discussion Paper 200703, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  5. Blien, Uwe & Kirchhof, Kai & Ludewig, Oliver, 2006. "Agglomeration effects on labour demand," IAB Discussion Paper 200628, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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