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Unemployment Benefits In A Period Of Crisis: The Effect On Unemployment Duration

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  • Anne Lauringson
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    Abstract

    The current study shows that the disincentive effects of unemployment benefits exist even during a period of deep recession. The study uses recent data for unemployment benefit recipients in Estonia – a country where the rise in unemployment during the global financial crisis was the highest in the entire European Union. Both a higher benefit level and a longer maximum duration of benefits decrease exits from unemployment to employment. Yet, compared to the pre-crisis period, the effects of unemployment benefits are slightly milder and more homogenous. In addition, unemployed people directed to active measures tend to exhibit a lower hazard of leaving unemployment just before the period of an active measure and during the period of receiving an active measure.

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    File URL: http://www.mtk.ut.ee/sites/default/files/mtk/RePEc/mtk/febpdf/febawb82.pdf
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    Bibliographic Info

    Paper provided by Faculty of Economics and Business Administration, University of Tartu (Estonia) in its series University of Tartu - Faculty of Economics and Business Administration Working Paper Series with number 82.

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    Length: 31 pages
    Date of creation: 2011
    Date of revision:
    Handle: RePEc:mtk:febawb:82

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    Keywords: unemployment benefits; disincentive effects; economic crisis; Estonia;

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    Cited by:
    1. Lilas Demmou, 2012. "Matching Skills and Jobs in Estonia," OECD Economics Department Working Papers 1007, OECD Publishing.

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