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The Impacts of Labor Market Policies on Job Search Behavior and Post-Unemployment Job Quality

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Author Info

  • Gaure, Simen

    ()
    (Ragnar Frisch Centre for Economic Research)

  • Røed, Knut

    ()
    (Ragnar Frisch Centre for Economic Research)

  • Westlie, Lars

    ()
    (Ragnar Frisch Centre for Economic Research)

Abstract

We examine empirically the impacts of labor market policies – in terms of unemployment insurance (UI) and active labor market programs (ALMP) – on the duration and outcome of job search and on the quality of a subsequent job. We find that time invested in job search tends to pay off in the form of higher earnings once a job match is formed. More generous UI raises expected unemployment duration, while improving the quality of the resultant job. Participation in ALMP raises the probability of finding a job and the level of expected earnings, but at the cost of lengthening job search.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3802.

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Length: 34 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3802

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Related research

Keywords: MMPH; timing-of-events; job search; multivariate hazards; NPMLE; job quality;

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References

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  1. Mário Centeno, 2004. "The Match Quality Gains from Unemployment Insurance," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
  2. Daron Acemoglu & Robert Shimer, 1999. "Productivity Gains from Unemployment Insurance," NBER Working Papers 7352, National Bureau of Economic Research, Inc.
  3. Røed, Knut & Westlie, Lars, 2007. "Unemployment Insurance in Welfare States: Soft Constraints and Mild Sanctions," Memorandum, Oslo University, Department of Economics 13/2007, Oslo University, Department of Economics.
  4. Christian Belzil, 2001. "Unemployment insurance and subsequent job duration: job matching versus unobserved heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 16(5), pages 619-636.
  5. Acemoglu, D. & Shimer, R., 1997. "Efficient Unemployment Insurance," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 97-9, Massachusetts Institute of Technology (MIT), Department of Economics.
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  7. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, Econometric Society, vol. 52(2), pages 271-320, March.
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  14. Simen Gaure & Knut Røed, 2007. "How Tight is the Labour Market?: Sources of Changes in the Aggregate Exit Rate from Unemployment across the Business Cycle," Journal of Business Cycle Measurement and Analysis, OECD Publishing,CIRET, vol. 2007(2), pages 155-173.
  15. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, Econometric Society, vol. 58(4), pages 757-82, July.
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  17. Pavoni, Nicola, 2007. "On optimal unemployment compensation," Journal of Monetary Economics, Elsevier, Elsevier, vol. 54(6), pages 1612-1630, September.
  18. Gaure, Simen & Roed, Knut & Zhang, Tao, 2007. "Time and causality: A Monte Carlo assessment of the timing-of-events approach," Journal of Econometrics, Elsevier, Elsevier, vol. 141(2), pages 1159-1195, December.
  19. Addison, John T. & Blackburn, McKinley L., 2000. "The effects of unemployment insurance on postunemployment earnings," Labour Economics, Elsevier, Elsevier, vol. 7(1), pages 21-53, January.
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  22. Dan A. Black & Jeffrey A. Smith & Mark C. Berger & Brett J. Noel, 2003. "Is the Threat of Reemployment Services More Effective Than the Services Themselves? Evidence from Random Assignment in the UI System," American Economic Review, American Economic Association, American Economic Association, vol. 93(4), pages 1313-1327, September.
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Citations

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Cited by:
  1. B. Cockx & M. Picchio, 2009. "Are Short-Lived Jobs Stepping Stones to Long-Lasting Jobs?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium, Ghent University, Faculty of Economics and Business Administration 09/560, Ghent University, Faculty of Economics and Business Administration.
  2. Bart Cockx & Matteo Picchio, 2013. "Scarring effects of remaining unemployed for long-term unemployed school-leavers," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(4), pages 951-980, October.
  3. Nicholas Lawson, 2013. "Fiscal Externalities and Optimal Unemployment Insurance," AMSE Working Papers 1357, Aix-Marseille School of Economics, Marseille, France, revised 21 Nov 2013.
  4. Horny, G. & Picchio, M., 2009. "Identification of lagged duration dependence in multiple-spell competing risks models," Working papers, Banque de France 260, Banque de France.
  5. Miki Kohara & Masaru Sasaki & Tomohiro Machikita, 2011. "Is longer unemployment rewarded with longer job tenure?," OSIPP Discussion Paper, Osaka School of International Public Policy, Osaka University 11E001, Osaka School of International Public Policy, Osaka University.
  6. Nicholas Lawson, 2013. "Fiscal Externalities and Optimal Unemployment Insurance," Working Papers halshs-00907807, HAL.
  7. Jahn, Elke J. & Rosholm, Michael, 2014. "Looking beyond the bridge: The effect of temporary agency employment on labor market outcomes," European Economic Review, Elsevier, Elsevier, vol. 65(C), pages 108-125.
  8. James Kau & Donald Keenan & Constantine Lyubimov, 2014. "First Mortgages, Second Mortgages, and Their Default," The Journal of Real Estate Finance and Economics, Springer, Springer, vol. 48(4), pages 561-588, May.

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