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The Effect of Sanctions on the Job Finding Rate: Evidence from Denmark

  • Michael Svarer

    ()

    (School of Economics and Management, University of Aarhus, Denmark)

This paper investigates the effect of sanctions of unemployment insurance benefits on the exit rate from unemployment for a sample of Danish unemployed. According to the findings are that even moderate sanctions have rather large effects. For both males and females the exit rate increases by more than 50% following imposition of a sanction. The paper exploits a rather large sample to elaborate on the basic findings. It is shown that harder sanctions have a larger effect, that the effect of sanctions wear out after around 3 months and that particular groups of unemployed are more responsive to sanctions than others. Finally, the analysis suggests that men react ex ante to the risk of being sanctioned in the sense that men who face higher sanction risk leave unemployment faster.

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File URL: ftp://ftp.econ.au.dk/afn/wp/07/wp07_10.pdf
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Paper provided by Department of Economics and Business Economics, Aarhus University in its series Economics Working Papers with number 2007-10.

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Length: 37
Date of creation: 27 Aug 2007
Handle: RePEc:aah:aarhec:2007-10
Contact details of provider: Web page: http://www.econ.au.dk/afn/

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  1. Van den Berg, Gerard J., 2000. "Duration Models: Specification, Identification, and Multiple Durations," MPRA Paper 9446, University Library of Munich, Germany.
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  3. Torben M. Andersen & Michael Svarer, 2007. "Flexicurity – labour market performance in Denmark," Economics Working Papers 2007-09, Department of Economics and Business Economics, Aarhus University.
  4. Jensen, Peter & Rosholm, Michael & Svarer, Michael, 2003. "The response of youth unemployment to benefits, incentives, and sanctions," European Journal of Political Economy, Elsevier, vol. 19(2), pages 301-316, June.
  5. Gerard J. van den Berg & Bas van der Klaauw, 2005. "Job Search Monitoring and Sanctions," CESifo DICE Report, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(2), pages 26-29, 07.
  6. Jan Boone & Peter Fredriksson & Bertil Holmlund & Jan C. van Ours, 2001. "Optimal Unemployment Insurance with Monitoring and Sanctions," CESifo Working Paper Series 616, CESifo Group Munich.
  7. Bart, COCKX & Muriel, DEJEMEPPE, 2007. "IIs the Notification of Monitoring a Threat to the Unemployed ? A Regression Discontinuity Approach," Discussion Papers (ECON - Département des Sciences Economiques) 2007016, Université catholique de Louvain, Département des Sciences Economiques.
  8. Dan A. Black & Jeffrey A. Smith & Mark C. Berger & Brett J. Noel, 2003. "Is the Threat of Reemployment Services More Effective Than the Services Themselves? Evidence from Random Assignment in the UI System," American Economic Review, American Economic Association, vol. 93(4), pages 1313-1327, September.
  9. Boone, Jan & Sadrieh, Abdolkarim & van Ours, Jan C, 2004. "Experiments on Unemployment Benefit Sanctions and Job Search Behaviour," CEPR Discussion Papers 4298, C.E.P.R. Discussion Papers.
  10. Abbring, Jaap H & van den Berg, Gerard J, 2003. "A simple procedure for the evaluation of treatment effects on duration variables," Working Paper Series 2003:19, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  11. Berg, Gerard J. van den & Klaauw, Bas van der & Ours, Jan C. van, 1998. "Punitive sanctions and the transition rate from welfare to work," Serie Research Memoranda 0033, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  12. Boone, Jan & van Ours, Jan C., 2000. "Modeling Financial Incentives to Get Unemployed Back to Work," IZA Discussion Papers 108, Institute for the Study of Labor (IZA).
  13. Michael Rosholm & Michael Svarer, 2004. "Estimating the Threat Effect of Active Labour Market Programmes," Economics Working Papers 2004-6, Department of Economics and Business Economics, Aarhus University.
  14. Rafael Lalive & Jan C. van Ours & Josef Zweim�ller, . "The Effect of Benefit Sanctions on the Duration of Unemployment," IEW - Working Papers 110, Institute for Empirical Research in Economics - University of Zurich.
  15. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The Nonparametric Identification of Treatment Effects in Duration Models," Econometrica, Econometric Society, vol. 71(5), pages 1491-1517, 09.
  16. Røed, Knut & Westlie, Lars, 2007. "Unemployment Insurance in Welfare States: Soft Constraints and Mild Sanctions," IZA Discussion Papers 2877, Institute for the Study of Labor (IZA).
  17. Peter Fredriksson & Bertil Holmlund, 2006. "Optimal unemployment insurance design: Time limits, monitoring, or workfare?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(5), pages 565-585, September.
  18. David Gray, 2003. "National Versus Regional Financing and Management of Unemployment and Related Benefits: The Case of Canada," OECD Social, Employment and Migration Working Papers 14, OECD Publishing.
  19. Lars Pico Geerdsen, 2006. "Is there a Threat Effect of Labour Market Programmes? A Study of ALMP in the Danish UI System," Economic Journal, Royal Economic Society, vol. 116(513), pages 738-750, 07.
  20. Jan Boone & Jan C. van Ours, 2006. "Modeling Financial Incentives to Get the Unemployed Back to Work," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 162(2), pages 227-252, June.
  21. Cees Gorter & Guyonne R. J. Kalb, 1996. "Estimating the Effect of Counseling and Monitoring the Unemployed Using a Job Search Model," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 590-610.
  22. Jaap H. Abbring & Gerard J. Berg & Jan C. Ours, 2005. "The Effect of Unemployment Insurance Sanctions on the Transition Rate from Unemployment to Employment," Economic Journal, Royal Economic Society, vol. 115(505), pages 602-630, 07.
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