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The effect of unemployment benefits on labour market behaviour in Luxembourg

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  • Ioana C. Salagean

  • Nicholas T. Longford

Abstract

We apply the potential outcomes framework to estimate the effect of awarding unemployment benefits on gaining long-term employment after an unemployment spell and on the time it takes to achieve it. We conclude that such awards, regarded as a treatment, are associated with poorer labour force outcomes than no awards.

Suggested Citation

  • Ioana C. Salagean & Nicholas T. Longford, 2013. "The effect of unemployment benefits on labour market behaviour in Luxembourg," Statistics in Transition new series, Główny Urząd Statystyczny (Polska), vol. 14(2), pages 249-272, June.
    • Handle: RePEc:csb:stintr:v:14:y:2013:i:2:p:249-272
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    References listed on IDEAS

    as
    1. Carling, Kenneth & Holmlund, Bertil & Vejsiu, Altin, 2001. "Do Benefit Cuts Boost Job Finding? Swedish Evidence from the 1990s," Economic Journal, Royal Economic Society, vol. 111(474), pages 766-790, October.
    2. repec:diw:diwwpp:dp50 is not listed on IDEAS
    3. Rafael Lalive & Jan Van Ours & Josef Zweimuller, 2006. "How Changes in Financial Incentives Affect the Duration of Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(4), pages 1009-1038.
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    6. Keisuke Hirano & Guido W. Imbens & Geert Ridder, 2003. "Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score," Econometrica, Econometric Society, vol. 71(4), pages 1161-1189, July.
    7. Lalive, Rafael & Zweimuller, Josef, 2004. "Benefit entitlement and unemployment duration: The role of policy endogeneity," Journal of Public Economics, Elsevier, vol. 88(12), pages 2587-2616, December.
    8. Michael Lechner, 2002. "Some practical issues in the evaluation of heterogeneous labour market programmes by matching methods," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 165(1), pages 59-82, February.
    9. Uusitalo, Roope & Verho, Jouko, 2010. "The effect of unemployment benefits on re-employment rates: Evidence from the Finnish unemployment insurance reform," Labour Economics, Elsevier, vol. 17(4), pages 643-654, August.
    10. Card, David & Levine, Phillip B., 2000. "Extended benefits and the duration of UI spells: evidence from the New Jersey extended benefit program," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 107-138, October.
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    12. Hunt, Jennifer, 1995. "The Effect of Unemployment Compensation on Unemployment Duration in Germany," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 88-120, January.
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