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Workfare for the old and long-term unemployed

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Listed author(s):
  • 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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File URL: http://www.sciencedirect.com/science/article/pii/S092753711300050X
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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
DOI: 10.1016/j.labeco.2013.04.008
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. Anders Gustafsson & Andreas Stephan & Alice Hallman & Nils Karlsson, 2016. "The “sugar rush” from innovation subsidies: a robust political economy perspective," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(4), pages 729-756, November.
  2. Barth, Erling & Moene, Karl O. & Willumsen, Fredrik, 2015. "Reprint of "The Scandinavian model—An interpretation"," Journal of Public Economics, Elsevier, vol. 127(C), pages 17-29.
  3. Barth, Erling & Moene, Karl O. & Willumsen, Fredrik, 2014. "The Scandinavian model—An interpretation," Journal of Public Economics, Elsevier, vol. 117(C), pages 60-72.
  4. 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.
  5. 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).
  6. 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.
  7. Lukas Fervers, 2016. "Fast track to the labour market or highway to hell? The effect of activation policies on quantity and quality of labour market integration," IAW Discussion Papers 125, Institut für Angewandte Wirtschaftsforschung (IAW).

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