An Empirical Evidence of Moral Hazard due to Unemployment Benefits
This paper examines how the unemployment benefit (UB) affects the intensity or search effort of the unemployed, which is measured by the workin conditions of a new job resultin from search behavior, controllin for the endo eneity of the duration of unemployment. Estimation results show that the hirin probability of UB recipients is si nificantly lower than that of non-recipients, with the ma nitude bein approximately halved. Additionally, the workin conditions of new jobs of UB recipients are si nificantly worse than those of non-recipients with re ard to wa es, occupation and firm size.
|Date of creation:||2000|
|Date of revision:|
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- Christofides, Louis N. & McKenna, C. J., 1995. "Unemployment insurance and moral hazard in employment," Economics Letters, Elsevier, vol. 49(2), pages 205-210, August.
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