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Sanctions and the exit from unemployment in two different benefit schemes

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  • Busk, Henna

Abstract

This paper investigates the effect of benefit sanctions on the exit rate from unemployment using a unique set of rich register data on unemployed Finnish individuals. The timing-of-events approach is applied to distinguish between the selection and causal effects of sanctioning. The results imply that the effect of sanctions differs according to the benefits received. Sanctions encourage unemployed individuals receiving flat-rate labour market support (LMS) to find jobs, whereas unemployed individuals receiving earnings-related (UI) allowances to leave the labour force. The encouraging effect of sanctions on active labour market policy programmes is relatively small and statistically significant only among LMS recipients.

Suggested Citation

  • Busk, Henna, 2016. "Sanctions and the exit from unemployment in two different benefit schemes," Labour Economics, Elsevier, vol. 42(C), pages 159-176.
  • Handle: RePEc:eee:labeco:v:42:y:2016:i:c:p:159-176
    DOI: 10.1016/j.labeco.2016.09.001
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    References listed on IDEAS

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    Cited by:

    1. Berg, Gerard J. van den & Uhlendorff, Arne & Wolff, Joachim, 2015. "Under heavy pressure : intense monitoring and accumulation of sanctions for young welfare recipients in Germany," IAB Discussion Paper 201534, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

    More about this item

    Keywords

    Unemployment; Benefits; Sanctions;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • 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

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