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How Do Different Entitlements to Unemployment Benefits Affect the Transitions from Unemployment into Employment?

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Author Info

  • Addison, John T.

    ()
    (University of South Carolina)

  • Portugal, Pedro

    ()
    (Banco de Portugal)

Abstract

In Portugal duration of benefits is exclusively age determined while replacement rates are to all intents and purposes uniform. We exploit differences in potential maximum duration of benefits for nearly matched pairs of individuals who differ in age by one year and in potential maximum duration of benefits by three months. In specifications that take account of unobserved individual heterogeneity, while controlling for pure age effects on escape rates, we find that lower maximum benefit duration is associated with substantially higher quarterly rates of job finding in the range 53 to 106 percent.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3016.

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Length: 18 pages
Date of creation: Aug 2007
Date of revision:
Publication status: published in: Economics Letters, 2008, 101 (3), 206-209
Handle: RePEc:iza:izadps:dp3016

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Keywords: unemployment benefits; job search; unemployment duration;

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References

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  1. Card, David & Levine, Phillip B., 2000. "Extended benefits and the duration of UI spells: evidence from the New Jersey extended benefit program," Journal of Public Economics, Elsevier, Elsevier, vol. 78(1-2), pages 107-138, October.
  2. Portugal, Pedro & Addison, John T., 2003. "Six Ways to Leave Unemployment," IZA Discussion Papers 954, Institute for the Study of Labor (IZA).
  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. John T. Addison & Pedro Portugal, 2003. "Unemployment Duration Competing and Defective Risks," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
  5. Rafael Lalive & Jan Van Ours & Josef Zweim�ller, 2006. "How Changes in Financial Incentives Affect the Duration of Unemployment," Review of Economic Studies, Oxford University Press, vol. 73(4), pages 1009-1038.
  6. Katz, Lawrence F. & Meyer, Bruce D., 1990. "The impact of the potential duration of unemployment benefits on the duration of unemployment," Journal of Public Economics, Elsevier, Elsevier, vol. 41(1), pages 45-72, February.
  7. Schmidt, Peter & Witte, Ann Dryden, 1989. "Predicting criminal recidivism using 'split population' survival time models," Journal of Econometrics, Elsevier, Elsevier, vol. 40(1), pages 141-159, January.
  8. Card, David & Chetty, Raj & Weber, Andrea, 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).
  9. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, Econometric Society, vol. 58(4), pages 757-82, July.
  10. 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.
  11. Carling, Kenneth & Edin, Per-Anders & Harkman, Anders & Holmlund, Bertil, 1996. "Unemployment duration, unemployment benefits, and labor market programs in Sweden," Journal of Public Economics, Elsevier, Elsevier, vol. 59(3), pages 313-334, March.
  12. 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.
  13. Pedro Portugal & Olivier Blanchard, 2001. "What Hides Behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets," American Economic Review, American Economic Association, American Economic Association, vol. 91(1), pages 187-207, March.
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Cited by:
  1. Dlugosz, Stephan & Stephan, Gesine & Wilke, Ralf A., 2009. "Fixing the leak: Unemployment incidence before and after the 2006 reform of unemployment benefits in Germany," IAB Discussion Paper 200925, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Anabela Carneiro & Pedro Portugal & Jose Varejão, 2013. "Catastrophic Job Destruction," OECD Social, Employment and Migration Working Papers 152, OECD Publishing.
  3. Thomas Le Barbanchon, 2012. "The Effect of the Potential Duration of Unemployment Benefits on Unemployment Exits to Work and Match Quality in France," Working Papers, Centre de Recherche en Economie et Statistique 2012-21, Centre de Recherche en Economie et Statistique.
  4. Caliendo, Marco & Tatsiramos, Konstantinos & Uhlendorff, Arne, 2009. "Benefit Duration, Unemployment Duration and Job Match Quality: A Regression-Discontinuity Approach," IZA Discussion Papers 4670, Institute for the Study of Labor (IZA).
  5. Centeno, Mario & Novo, Alvaro A., 2012. "Do Low-Wage Workers React Less to Longer Unemployment Benefits? Quasi-Experimental Evidence," IZA Discussion Papers 6992, Institute for the Study of Labor (IZA).
  6. Pedro S. Martins & Sofia Pessoa e Costa, 2014. "Reemployment effects from increased activation: Evidence from times of crisis," Working Papers 52, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.

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