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Modelling the Time on Unemployment Insurance Benefits

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Author Info
Govert E. Bijwaard () (Erasmus University Rotterdam and IZA)

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Abstract

A duration model based on the time on Unemployment Insurance (UI) benefits instead of a model based on the time till re-employment is more relevant from a cost-benefit perspective. The contribution of this paper is to extend the standard (mixed) Proportional Hazard model to account for an upper bound on the duration. We use a modified mover-stayer model to this end and discuss the interpretation of the parameters. In an empirical application we compare the method with the standard analysis of unemployment duration. We also derive the expected UI-benefit costs implied by the model for some typical unemployed individuals.

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File URL: ftp://repec.iza.org/RePEc/Discussionpaper/dp2936.pdf
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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2936.

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Length: 10 pages
Date of creation: Jul 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2936

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Related research
Keywords: UI-benefits; maximum duration; mixed proportional hazard; mover-stayer model;

Other versions of this item:

Find related papers by JEL classification:
C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings

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This page was last updated on 2009-12-14.

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