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An extra time duration model with application to unemployment duration under benefits in Spain

This paper postulates that the effect of unemployment benefits on the hazard rates changes considerably using a traditional duration model that uses only unemployment insurance (UI) data, or deals with unemployment assistance (UA) as a mere extension of UI, instead of an extra time duration model that accounts separately for transition rates to work of the unemployed who receive UI and UA. For UI recipients the hazard rate rises dramatically when UI benefits lapse approaches. On the contrary, for UA recipients the hazard rate remains flat or even has a slight fall nearby the UA lapse. Finally, there is a group of unemployed qualified for UA that quit UI due to the income fall that they will experience when they pass from UI to UA.

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Paper provided by Centro de Estudios Andaluces in its series Economic Working Papers at Centro de Estudios Andaluces with number E2003/38.

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Length: 41 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:cea:doctra:e2003_38
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  1. Hunt, Jennifer, 1995. "The Effect of Unemployment Compensation on Unemployment Duration in Germany," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 88-120, January.
  2. Carling, Kenneth & Edin, Per-Anders & Harkman, Anders & Holmlund, Bertil, 1996. "Unemployment duration, unemployment benefits, and labor market programs in Sweden," Journal of Public Economics, Elsevier, vol. 59(3), pages 313-334, March.
  3. John C. Ham & Samuel Rea, 1986. "Unemployment Insurance and Male Unemployment Duration in Canada," Working Papers 592, Princeton University, Department of Economics, Industrial Relations Section..
  4. Dipak C. Jain & Naufel J. Vilcassim, 1991. "Investigating Household Purchase Timing Decisions: A Conditional Hazard Function Approach," Marketing Science, INFORMS, vol. 10(1), pages 1-23.
  5. Narendranathan, W & Stewart, Mark B, 1993. "How Does the Benefit Effect Vary as Unemployment Spells Lengthen?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(4), pages 361-81, Oct.-Dec..
  6. Catalin Pauna & John S. Earle, 1998. "Long-term unemployment, social assistance and labor market policies in Romania," Empirical Economics, Springer, vol. 23(1/2), pages 203-235.
  7. Lynch, Lisa M, 1989. "The Youth Labor Market in the Eighties: Determinants of Re-employment Probabilities for Young Men and Women," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 37-45, February.
  8. Wadsworth, Jonathan, 1991. "Unemployment Benefits and Search Effort in the UK Labour Market," Economica, London School of Economics and Political Science, vol. 58(229), pages 17-34, February.
  9. Gyula Nagy & John Micklewright, 1998. "Unemployment assistance in Hungary," Empirical Economics, Springer, vol. 23(1/2), pages 155-175.
  10. Bruce D. Meyer, 1988. "Unemployment Insurance And Unemployment Spells," NBER Working Papers 2546, National Bureau of Economic Research, Inc.
  11. Katz, Lawrence F. & Meyer, Bruce D., 1990. "The impact of the potential duration of unemployment benefits on the duration of unemployment," Journal of Public Economics, Elsevier, vol. 41(1), pages 45-72, February.
  12. Heckman, James J. & Singer, Burton, 1984. "Econometric duration analysis," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 63-132.
  13. James J. Heckman & V. Joseph Hotz & James R. Walker, . "New Evidence on the Timing and Spacing of Births," University of Chicago - Population Research Center 85-1, Chicago - Population Research Center.
  14. Fallick, Bruce Chelimsky, 1991. "Unemployment Insurance and the Rate of Re-employment of Displaced Workers," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 228-35, May.
  15. repec:bla:restud:v:51:y:1984:i:2:p:231-41 is not listed on IDEAS
  16. 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.
  17. Frederick J. Tannery, 1983. "Search Effort and Unemployment Insurance Reconsidered," Journal of Human Resources, University of Wisconsin Press, vol. 18(3), pages 432-440.
  18. Groot, Wim, 1990. "The effects of benefits and duration dependence on re-employment probabilities," Economics Letters, Elsevier, vol. 32(4), pages 371-376, April.
  19. van den Berg, Gerard J, 1990. "Search Behaviour, Transitions to Nonparticipation and the Duration of Unemployment," Economic Journal, Royal Economic Society, vol. 100(402), pages 842-65, September.
  20. Blau, David M & Robins, Philip K, 1990. "Job Search Outcomes for the Employed and Unemployed," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 637-55, June.
  21. Hujer, Reinhard & Schneider, Hilmar, 1989. "The analysis of labor market mobility using panel data," European Economic Review, Elsevier, vol. 33(2-3), pages 530-536, March.
  22. Katherine Terrell & Michaela Erbenova & Vit Sorm, 1998. "Work incentive and other effects of social assistance and unemployment benefit policy in the Czech Republic," Empirical Economics, Springer, vol. 23(1/2), pages 87-120.
  23. Cullen, Julie Berry & Gruber, Jonathan, 2000. "Does Unemployment Insurance Crowd Out Spousal Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 546-72, July.
  24. Nickell, Stephen J, 1979. "Estimating the Probability of Leaving Unemployment," Econometrica, Econometric Society, vol. 47(5), pages 1249-66, September.
  25. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, vol. 47(4), pages 939-56, July.
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