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Job search requirements for older unemployed: Transitions to employment, early retirement and disability benefits

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  • Lammers, Marloes
  • Bloemen, Hans
  • Hochguertel, Stefan

Abstract

We use a recent policy change in the Netherlands to study how changes in search requirements for the older unemployed affect their transition rates to employment, early retirement and sickness/disability benefits. The reform, becoming effective on January 1 2004, requires the elderly to formally report their job search efforts to the employment office in order to avoid a (temporary) cut in benefits. Before the new law was passed, unemployed individuals were allowed to stop all search activity at the moment they turned 57.5. Estimating various duration models using difference-in-difference and regression discontinuity approaches, we find that for several groups of individuals who are affected by the policy change, the stricter search requirements significantly increases their entry rate into employment. However, we also find evidence of a higher outflow to sickness/disability insurance schemes, a presumably unwanted side-effect of the policy change.

Suggested Citation

  • Lammers, Marloes & Bloemen, Hans & Hochguertel, Stefan, 2013. "Job search requirements for older unemployed: Transitions to employment, early retirement and disability benefits," European Economic Review, Elsevier, vol. 58(C), pages 31-57.
  • Handle: RePEc:eee:eecrev:v:58:y:2013:i:c:p:31-57 DOI: 10.1016/j.euroecorev.2012.11.003
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    Cited by:

    1. Hullegie, P.G.J., 2012. "Essays on health and labor economics," Other publications TiSEM dcc68fc9-7af1-4ba9-8f90-6, Tilburg University, School of Economics and Management.
    2. Kyyrä, Tomi & Pesola, Hanna, 2017. "Long-Term Effects of Extended Unemployment Benefits for Older Workers," IZA Discussion Papers 10839, Institute for the Study of Labor (IZA).
    3. Alfonso Sánchez-Martin & J. García-Pérez & Sergi Jiménez-Martín, 2014. "Delaying the Normal and Early Retirement Ages in Spain: Behavioural and Welfare Consequences for Employed and Unemployed Workers," De Economist, Springer, pages 341-375.
    4. Bernhard Boockmann & Tobias Brändle, 2015. "Integrating Older Employees into the Labour Market – Evidence from a German Labour Market Programme," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(3), pages 59-64, October.
    5. Staubli, Stefan & Zweimüller, Josef, 2013. "Does raising the early retirement age increase employment of older workers?," Journal of Public Economics, Elsevier, vol. 108(C), pages 17-32.
    6. repec:ces:ifodic:v:13:y:2015:i:3:p:19172607 is not listed on IDEAS
    7. Nicholas Lawson, 2014. "Social Program Substitution and Optimal Policy," Working Papers halshs-00993127, HAL.
    8. Lukas Inderbitzin & Stefan Staubli & Josef Zweimüller, 2016. "Extended Unemployment Benefits and Early Retirement: Program Complementarity and Program Substitution," American Economic Journal: Economic Policy, American Economic Association, vol. 8(1), pages 253-288, February.
    9. Staubli, Stefan & Zweimüller, Josef, 2011. "Does Raising the Retirement Age Increase Employment of Older Workers?," CEPR Discussion Papers 8510, C.E.P.R. Discussion Papers.
    10. Bart Cockx & Eva Van Belle, 2016. "Waiting Longer Before Claiming And Activating Youth. No Point?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 16/922, Ghent University, Faculty of Economics and Business Administration.
    11. Patrick Hullegie & Jan Ours, 2014. "Seek and Ye Shall Find: How Search Requirements Affect Job Finding Rates of Older Workers," De Economist, Springer, vol. 162(4), pages 377-395, December.
    12. Lawson, Nicholas, 2015. "Social program substitution and optimal policy," Labour Economics, Elsevier, vol. 37(C), pages 13-27.
    13. Rainer Eppel & Helmut Mahringer & Andrea Weber, 2014. "Job Search Behaviour and Job Search Success of the Unemployed," WIFO Working Papers 471, WIFO.
    14. Paweł Strzelecki & Joanna Tyrowicz, 2015. "Crowding (out) the retirees? RDD application to raising effective retirement age in Poland," Working Papers 2015-10, Faculty of Economic Sciences, University of Warsaw.
    15. Hans Bloemen, 2016. "Job search requirements for older unemployed workers," IZA World of Labor, Institute for the Study of Labor (IZA), pages 235-235, March.
    16. Anne Sonnet & Hilde Olsen & Thomas Manfredi, 2014. "Towards More Inclusive Ageing and Employment Policies: The Lessons from France, The Netherlands, Norway and Switzerland," De Economist, Springer, vol. 162(4), pages 315-339, December.
    17. Boockmann, Bernhard & Brändle, Tobias, 2015. "Coaching, Counseling, Case-Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back into the Labor Market?," IZA Discussion Papers 8811, Institute for the Study of Labor (IZA).
    18. Fervers, Lukas & Brändle, Tobias & Webel, Carina, 2014. "Decomposing a Matching Estimation - Correlated Unobserved non-random Selection, Substitution, and Causal Effects in a Large Scale ALMP Program in Germany," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100500, Verein für Socialpolitik / German Economic Association.
    19. Pierre Koning & Max Raterink, 2013. "Re-employment Rates of Older Unemployed Workers: Decomposing the Effect of Birth Cohorts and Policy Changes," De Economist, Springer, vol. 161(3), pages 331-348, September.
    20. 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.
    21. Reiso, Katrine Holm, 2014. "The Effect of Welfare Reforms on Benefit Substitution," Discussion Paper Series in Economics 22/2014, Department of Economics, Norwegian School of Economics.
    22. Nicholas Lawson, 2014. "Social Program Substitution and Optimal Policy," AMSE Working Papers 1417, Aix-Marseille School of Economics, Marseille, France, revised 16 May 2014.

    More about this item

    Keywords

    Duration analysis; Policy evaluation; Search effort; Substitution;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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