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Unemployment Insurance and Incentives in Hungary

Author

Listed:
  • Micklewright, John
  • Nagy, Gyula

Abstract

We investigate the effect of changes in unemployment insurance (UI) rules in Hungary on the outflow rate from the UI register. Existing claims to UI are `grandfathered' in Hungary when UI rules change - new rules are applied only to new claims and existing claims continue to be administered under the old rules. Entitlement periods to UI were cut substantially at the start of 1993 and using non-parametric methods we compare the outflow rate from claims beginning in January 1993 with those beginning in December 1992 - a total sample size of 80,000 claims. Differences in job exit hazards between the December and January samples are found for some work history groups, but there are no sharp rises in the hazards before expiry of UI entitlement. Hazards of exits to labour market programmes do rise just before UI expiry. The results suggest the unemployed in Hungary to be fairly inelastic to changes in UI benefits.

Suggested Citation

  • Micklewright, John & Nagy, Gyula, 1995. "Unemployment Insurance and Incentives in Hungary," CEPR Discussion Papers 1118, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1118
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    File URL: http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=1118
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    Citations

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    Cited by:

    1. Voicu, Alexandru, 2005. "Employment dynamics in the Romanian labor market. A Markov chain Monte Carlo approach," Journal of Comparative Economics, Elsevier, vol. 33(3), pages 604-639, September.
    2. Pablo de Pedraza, 2008. "Labour Market Matching Efficiency In The Czech Republic Transition," William Davidson Institute Working Papers Series wp920, William Davidson Institute at the University of Michigan.
    3. Micklewright, John & Nagy, Gyula, 1999. "Living Standards and Incentives in Transition: the Implications of Unemployment Insurance Exhaustion in Hungary," CEPR Discussion Papers 2061, C.E.P.R. Discussion Papers.
    4. Puhani, Patrick A., 1996. "Poland on the dole: unemployment benefits, training, and long-term unemployment during transition," ZEW Discussion Papers 96-30, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Polachek, Solomon & Xiang, Jun, 2005. "The Effects of Incomplete Employee Wage Information: A Cross-Country Analysis," IZA Discussion Papers 1735, Institute for the Study of Labor (IZA).
    6. repec:eee:labchp:v:3:y:1999:i:pb:p:2809-2857 is not listed on IDEAS

    More about this item

    Keywords

    Hungary; Incentives; Transition; Unemployment Benefit;

    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
    • P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance

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