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How Changes in Unemployment Benefit Duration Affect the Inflow into Unemployment

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Author Info

  • van Ours, Jan C.

    ()
    (Tilburg University)

  • Tuit, Sander

    ()
    (Tilburg University)

Abstract

We study how changes in the maximum benefit duration affect the inflow into unemployment in the Netherlands. Until August 2003, workers who became unemployed after age 57.5 were entitled to unemployment benefits until the age of 65, after which they would receive old age pensions. This characteristic made it attractive for workers to enter unemployment shortly after age 57.5 rather than shortly before. Indeed, we find a peak in the inflow into unemployment for workers after age 57.5. From August 2003 onwards the maximum benefit durations were reduced. We find that shortly after 2003 the peak in the inflow disappeared.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4691.

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Length: 21 pages
Date of creation: Jan 2010
Date of revision:
Publication status: published in: Economics Letters, 2010, 109 (2), 105-107
Handle: RePEc:iza:izadps:dp4691

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Keywords: unemployment inflow; potential benefit duration; unemployment insurance;

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References

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  1. David A. Green & Timothy Sargent, 1998. "Unemployment Insurance and Job Durations: Seasonal and Non-Seasonal Jobs," Canadian Journal of Economics, Canadian Economics Association, vol. 31(2), pages 247-278, May.
  2. Christofides, Louis N & McKenna, C J, 1996. "Unemployment Insurance and Job Duration in Canada," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 286-312, April.
  3. Christofides, Louis N. & McKenna, C. J., 1995. "Unemployment insurance and moral hazard in employment," Economics Letters, Elsevier, vol. 49(2), pages 205-210, August.
  4. Green, David A & Riddell, W Craig, 1997. "Qualifying for Unemployment Insurance: An Empirical Analysis," Economic Journal, Royal Economic Society, vol. 107(440), pages 67-84, January.
  5. Lalive, R. & Ours, J.C. van & Zweim├╝ller, J., 2006. "How Changes in Potential Benefit Duration Affect Equilibrium Unemployment," Discussion Paper 2006-94, Tilburg University, Center for Economic Research.
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Cited by:
  1. Tuit, Sander & van Ours, Jan C., 2010. "How changes in unemployment benefit duration affect the inflow into unemployment," Economics Letters, Elsevier, vol. 109(2), pages 105-107, November.

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