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A new look at the UI effect on transitions from unemployment into wage employment in Spain: the limited duration of the UI benefits entitlement

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  • Maria Teresa Gonzalo

Abstract

This article is a new look at the study of the unemployment insurance effect on the transition probability from unemployment into wage employment in Spain. It is found that individuals increase their search effort and reduce their reservation wage as the unemployment insurance benefit entitlement exhaustion approaches, and their exit rate equals that of the unemployed who never got benefits from the exhaustion moment. Financial constraints are not important in Spain. Business cycle affects more to long-term unemployed. And, finally, it is found that the probability of being offered a vacancy decreases with time spent in unemployment, having allowed for unobservable heterogeneity.

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  • Maria Teresa Gonzalo, 2002. "A new look at the UI effect on transitions from unemployment into wage employment in Spain: the limited duration of the UI benefits entitlement," Applied Economics, Taylor & Francis Journals, vol. 34(17), pages 2177-2187.
    • Handle: RePEc:taf:applec:v:34:y:2002:i:17:p:2177-2187
    DOI: 10.1080/00036840210148067
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    References listed on IDEAS

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    1. Wiji Narendranathan & Mark B. Stewart, 1993. "Modelling the Probability of Leaving Unemployment: Competing Risks Models with Flexible Base‐Line Hazards," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 42(1), pages 63-83, March.
    2. Olympia Bover & Manuel Arellano & Samuel Bentolila, 2002. "Unemployment Duration, Benefit Duration and the Business Cycle," Economic Journal, Royal Economic Society, vol. 112(479), pages 223-265, April.
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    Cited by:

    1. Ott Toomet, 2005. "Does an increase in unemployment income lead to longer unemployment spells? Evidence using Danish unemployment assistance data," Economics Working Papers 2005-07, Department of Economics and Business Economics, Aarhus University.
    2. Solomon W. Polachek & Jun (Jeff) Xiang, 2006. "The Effects of Incomplete Employee Wage Information: A Cross-Country Analysis," Research in Labor Economics, in: The Economics of Immigration and Social Diversity, pages 35-75, Emerald Group Publishing Limited.
    3. Alfonso Alba & Jose Maria Arranz & Fernando Muñoz-Bullón, 2012. "Re-employment probabilities of unemployment benefit recipients," Applied Economics, Taylor & Francis Journals, vol. 44(28), pages 3645-3664, October.
    4. Ott-Siim Toomet, 2005. "Does an Increase in Unemployment Income Lead to Longer Unemployment Spells? Evidence Using Danish Unemployment Assistance Data," Bank of Estonia Working Papers 2005-09, Bank of Estonia, revised 10 Oct 2005.

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