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Workfare for the old and long-term unemployed

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  • Bennmarker, Helge
  • Skans, Oskar Nordström
  • Vikman, Ulrika

Abstract

We estimate the effects of conditioning benefits on program participation among older long-term unemployed workers. We exploit a Swedish reform which reduced UI duration from 90 to 60weeks for a group of older unemployed workers in a setting where workers who exhausted their benefits received unchanged transfers if they agreed to participate in a work practice program. Our results show that job finding increased as a result of the shorter duration of passive benefits. The time profile of the job-finding effects suggests that the results are due to deterrence during the program-entry phase. We find no impact on ensuing job durations or wages, suggesting that the increased job-finding rate was driven by increased search intensity rather than lower reservation wages. A crude cost–benefit analysis suggests that the reform reduced the combined cost of programs and transfers.

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Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 25 (2013)
Issue (Month): C ()
Pages: 25-34

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Handle: RePEc:eee:labeco:v:25:y:2013:i:c:p:25-34
Contact details of provider: Web page: http://www.elsevier.com/locate/labeco

Keywords: Activation; Program evaluation; UI; Duration;

Other versions of this item:

Find related papers by JEL classification:
  • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
  • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
  • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
  • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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Cited by:

  1. Barth, Erling & Moene, Karl O. & Willumsen, Fredrik, 2014. "The Scandinavian model—An interpretation," Journal of Public Economics, Elsevier, vol. 117(C), pages 60-72.
  2. 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.

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