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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. Lalive, R. & Ours, J.C. van & Zweimüller, J., 2004. "How Changes in Financial Incentives Affect the Duration of Unemployment," Discussion Paper 2004-86, Tilburg University, Center for Economic Research.
  2. David Card & Phillip B. Levine, 1998. "Extended Benefits and the Duration of UI Spells: Evidence from the New Jersey Extended Benefit Program," NBER Working Papers 6714, National Bureau of Economic Research, Inc.
  3. Peter Schmidt & Ann Dryden Witte, 1987. "Predicting Criminal Recidivism Using "Split Population" Survival Time Models," NBER Working Papers 2445, National Bureau of Economic Research, Inc.
  4. Pedro Portugal & John T. Addison, 2003. "Six Ways to Leave Unemployment," Working Papers w200311, Banco de Portugal, Economics and Research Department.
  5. John T. Addison & Pedro Portugal, 2003. "Unemployment Duration Competing and Defective Risks," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
  6. Pedro Portugal & Olivier Blanchard, 2001. "What Hides Behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets," American Economic Review, American Economic Association, vol. 91(1), pages 187-207, March.
  7. 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.
  8. 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.
  9. 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.
  10. Lawrence F. Katz & Bruce D. Meyer, 1988. "The Impact of the Potential Duration of Unemployment Benefits on the Duration of Unemployment," NBER Working Papers 2741, National Bureau of Economic Research, Inc.
  11. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-82, July.
  12. 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, vol. 59(3), pages 313-334, March.
  13. 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.
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Cited by:
  1. 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.
  2. Dlugosz, Stephan & Stephan, Gesine & Wilke, Ralf A., 2009. "Fixing the leak: unemployment incidence before and after the 2006 reform of unemployment benefits in Germany," ZEW Discussion Papers 09-079, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Anabela Carneiro & Pedro Portugal & Jose Varejão, 2013. "Catastrophic Job Destruction," OECD Social, Employment and Migration Working Papers 152, OECD Publishing.
  4. Marco Caliendo & Konstantinos Tatsiramos & Arne Uhlendorff, 2009. "Benefit Duration, Unemployment Duration and Job Match Quality: A Regression-Discontinuity Approach," Discussion Papers of DIW Berlin 967, DIW Berlin, German Institute for Economic Research.
  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. 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 2012-21, Centre de Recherche en Economie et Statistique.

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