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The Relationship between Unemployment Benefits and Re‐employment Probabilities: Evidence from Spain

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  • Stephen P. Jenkins
  • Carlos García‐Serrano

Abstract

We provide the first Spanish evidence about the effects on re‐employment probabilities of variations in benefit levels and time‐to‐exhaustion. Increases in unemployment insurance (UI) benefit levels had a small disincentive effect on the re‐employment hazard on average. Around this average, there were larger disincentive effects for men with elapsed durations between 4 and 18 months, whereas for men unemployed longer than 18 months, or for men resident in the south, the effect was negligible. Re‐employment hazards increased when UI exhaustion was imminent, but the change was small. Extensions to unemployment assistance eligibility in 1989 for men aged 45+ years lowered re‐employment probabilities.

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  • Stephen P. Jenkins & Carlos García‐Serrano, 2004. "The Relationship between Unemployment Benefits and Re‐employment Probabilities: Evidence from Spain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(2), pages 239-260, May.
    • Handle: RePEc:bla:obuest:v:66:y:2004:i:2:p:239-260
    DOI: 10.1046/j.0305-9049.2003.00083.x
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    2. Ana Iturriza & Arjun S. Bedi & Robert Sparrow, 2011. "Unemployment Assistance and Transition to Employment in Argentina," Economic Development and Cultural Change, University of Chicago Press, vol. 59(4), pages 811-837.
    3. Lars Pico Geerdsen & Stéphanie Vincent Lyk-Jensen & Cecilie Dohlmann Weatherall, 2018. "Accelerating the transition to employment at benefit exhaustion: still possible after four years of unemployment?," Empirical Economics, Springer, vol. 54(3), pages 1107-1135, May.
    4. Siedler, Thomas & Rainer, Helmut, 2008. "Social networks in determining migration and labour market outcomes: evidence from the German reunification," ISER Working Paper Series 2008-36, Institute for Social and Economic Research.
    5. Alfonso Alba & Jose Maria Arranz & Fernando Muñoz-Bullón, 2012. "Re-employment probabilities of unemployment benefit recipients," Applied Economics, Taylor & Francis Journals, vol. 44(28), pages 3645-3664, October.
    6. Marta C. Lopes, 2022. "A review on the elasticity of unemployment duration to the potential duration of unemployment benefits," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1212-1224, September.
    7. Tue Gørgens & Dean Robert Hyslop, 2018. "The Specification of Dynamic Discrete-Time Two-State Panel Data Models," Econometrics, MDPI, vol. 7(1), pages 1-16, December.
    8. Nagore García, Amparo & van Soest, Arthur, 2014. "Unemployment Transitions to Stable and Unstable Jobs Before and During the Crisis," IZA Discussion Papers 8121, Institute of Labor Economics (IZA).
    9. Helmut Rainer & Thomas Siedler, 2009. "The role of social networks in determining migration and labour market outcomes," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(4), pages 739-767, October.
    10. Francisco Guijarro, 2018. "Economic Recovery and Effectiveness of Active Labour Market Initiatives for the Unemployed in Spain: A Gender Perspective of the Valencian Region," Sustainability, MDPI, vol. 10(10), pages 1-15, October.
    11. Michael Kind, 2015. "A Level Playing Field: An Optimal Weighting Scheme of Dismissal Protection Characteristics," LABOUR, CEIS, vol. 29(1), pages 79-99, March.
    12. José María Arranz & Carlos García- Serrano, 2004. "The influence of previous labour market experiences on subsequent job tenure," Hacienda Pública Española / Review of Public Economics, IEF, vol. 168(1), pages 47-68, march.
    13. Alba, Alfonso & Arranz, José M. & Muñoz-Bullón, Fernando, 2006. "Unemployment duration, unemployment benefits and recalls," DEE - Working Papers. Business Economics. WB wb066218, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    14. Virve Ollikainen & Tomi Kyyrä, 2006. "To Search or Not to Search? The Effects of UI Benefit Extension for the Elderly Unemployed," Discussion Papers 400, Government Institute for Economic Research Finland (VATT).
    15. Roed, Knut & Zhang, Tao, 2005. "Unemployment duration and economic incentives--a quasi random-assignment approach," European Economic Review, Elsevier, vol. 49(7), pages 1799-1825, October.
    16. JOSE Ma ARRANZ & Juan Muro, 2004. "Recurrent unemployment, welfare benefits and heterogeneity," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(4), pages 423-441.
    17. Catalina Jordi & Miguel Manjón, 2014. "The determinants of urban (un)employment duration: evidence from Barcelona," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(2), pages 515-556, September.
    18. Alba-Ramirez, Alfonso & Arranz, Jose M. & Munoz-Bullon, Fernando, 2007. "Exits from unemployment: Recall or new job," Labour Economics, Elsevier, vol. 14(5), pages 788-810, October.
    19. Vera Brenčič, 2010. "Do Employers Respond to the Costs of Continued Search?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(2), pages 221-245, April.
    20. Morales, Marina, 2018. "Can the composition of the family during adolescence influence their future unemployment situation? Evidence for Spain," MPRA Paper 86770, University Library of Munich, Germany.
    21. Sergi Jimenez-Martin & Judit Castello, 2013. "Business cycle and spillover effects on pre-retirement behavior in Spain," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    22. Blázquez, Maite & Herrarte, Ainhoa & Sáez, Felipe, 2012. "Occupational matching: The case of job seekers inscribed at Public Employment Offices," Working Papers in Economic Theory 2012/02, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
    23. José María Arranz & Carlos García Serrano, 2015. "Los sistemas de prestaciones por desempleo de “experience rating”. Un análisis de los despidos temporales y los subsidios cruzados en España," Hacienda Pública Española / Review of Public Economics, IEF, vol. 212(1), pages 129-168, March.
    24. Sergi Jiménez Martín & Judit Vall Castello, 2009. "Business Cycle Effects on Labour Force Transitions for Older People in Spain," Working Papers 2009-25, FEDEA.

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