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An Evaluation of Paid Leave: Participation and Labor Market Tightness

Author

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  • Karsten Albæk

    (Institute of Economics, University of Copenhagen)

Abstract

This paper analyzes a labor market program which enables workers to leave employment temporarily with a compensation financed by the taxpayers. The main aim of the program was to increase the chances of the unemployed finding a job. However, the empirical analysis reveals a clear negative relationship between the unemployment rate and transition rates from employment into the paid leave scheme. Program participation is low, precisely in those labor market states, where the scheme has a potential to perform as a remedy by increasing the transition rate from unemployment to employment. Several possible explanations are discussed.

Suggested Citation

  • Karsten Albæk, 1999. "An Evaluation of Paid Leave: Participation and Labor Market Tightness," Discussion Papers 99-19, University of Copenhagen. Department of Economics.
  • Handle: RePEc:kud:kuiedp:9919
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    File URL: http://www.econ.ku.dk/english/research/publications/wp/1999/9919.pdf/
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    Keywords

    labor market policy; temporary leave; parental leave; sabbatical; education; unemployment; search;
    All these keywords.

    JEL classification:

    • J29 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Other
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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