IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper

To Search or Not to Search? The Effects of UI Benefit Extension for the Elderly Unemployed

  • Virve Ollikainen
  • Tomi Kyyrä

In Finland the older unemployed can collect unemployment insurance (UI) benefits until retirement, while the entitlement period for younger groups is two years. In 1997 the eligibility age of persons benefiting from extended benefits was raised from 53 to 55. This paper takes advantage of this quasi-experimental setting to identify the effect of extended UI benefits on transitions out of unemployment among the elderly unemployed. We apply a competing risks version of a split population duration model to account for multiple exit routes and the possibility that some of the elderly unemployed may not be active in the labour market due to pension rules. We estimate that roughly half of the workers with extended UI benefits have effectively withdrawn from the labour market. Those who remain active have a similar hazard rate to employment as individuals with the two-year entitlement period, but much lower hazard rates to non-participation and labour market programmes.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.vatt.fi/file/vatt_publication_pdf/k400.pdf
Download Restriction: no

File URL: http://www.vatt.fi/publications/latestPublications/publication/Publication_1345_id/713
Download Restriction: no

Paper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 400.

as
in new window

Length:
Date of creation: 20 Oct 2006
Date of revision:
Handle: RePEc:fer:dpaper:400
Contact details of provider: Postal:
Arkadiankatu 7, P.O. Box 1279, FI-00101 Helsinki

Phone: +358 295 519 400
Fax: +358 295 519 599
Web page: http://www.vatt.fi/
Email:


More information through EDIRC

Order Information: Email:


References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Bratberg, E. & Vaage, K., 2000. "Spell Durations with Long Unemployment Insurance Periods," Norway; Department of Economics, University of Bergen 208, Department of Economics, University of Bergen.
  2. Knut Roed & Tao Zhang, 2003. "Does Unemployment Compensation Affect Unemployment Duration?," Economic Journal, Royal Economic Society, vol. 113(484), pages 190-206, January.
  3. Romain Duval, 2003. "The Retirement Effects of Old-Age Pension and Early Retirement Schemes in OECD Countries," OECD Economics Department Working Papers 370, OECD Publishing.
  4. John T. Addison & Pedro Portugal, 2000. "Unemployment Duration: Competing and Defective Risks," Working Papers w200001, Banco de Portugal, Economics and Research Department.
  5. Bruce D. Meyer, 1988. "Unemployment Insurance And Unemployment Spells," NBER Working Papers 2546, National Bureau of Economic Research, Inc.
  6. Tomi Kyyrä & Ralf A. Wilke, 2007. "Reduction in the Long-Term Unemployment of the Elderly: A Success Story from Finland," Journal of the European Economic Association, MIT Press, vol. 5(1), pages 154-182, 03.
  7. Erkki Koskela & Roope Uusitalo, 2003. "The Un-Intended Convergence: How the Finnish Unemployment Reached the European Level," CESifo Working Paper Series 878, CESifo Group Munich.
  8. 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.
  9. Schmidt, Peter & Witte, Ann Dryden, 1989. "Predicting criminal recidivism using 'split population' survival time models," Journal of Econometrics, Elsevier, vol. 40(1), pages 141-159, January.
  10. 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.
  11. Holmlund, B., 1997. "Unemployment Insurance in Theory and Practice," Papers 1997-25, Uppsala - Working Paper Series.
  12. J. P. Fine, 1999. "Analysing competing risks data with transformation models," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 61(4), pages 817-830.
  13. Swaim, Paul & Podgursky, Michael, 1994. "Female Labor Supply Following Displacement: A Split-Population Model of Labor Force Participation and Job Search," Journal of Labor Economics, University of Chicago Press, vol. 12(4), pages 640-56, October.
  14. Carling, K. & Holmlund, B. & Vejsiu, A., 1999. "Do Benefit Cuts Boost Job Findings? Swedish Evidence from the 1990s," Papers 1999:20, Uppsala - Working Paper Series.
  15. Dale T. Mortensen, 1977. "Unemployment insurance and job search decisions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 30(4), pages 505-517, July.
  16. Winter-Ebmer, Rudolf, 1998. "Potential Unemployment Benefit Duration and Spell Length: Lessons from a Quasi-Experiment in Austria," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(1), pages 33-45, February.
  17. Lars Ljungqvist & Thomas J. Sargent, 1996. "The European Unemployment Dilemma," EUI-RSCAS Working Papers 36, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
  18. Pudney, Stephen & Thomas, Jonathan, 1995. "Specification Tests for the Competing Risks Duration Model: An Application to Unemployment Duration and Sectoral Movement," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(3), pages 323-47, August.
  19. Ham, John C & Rea, Samuel A, Jr, 1987. "Unemployment Insurance and Male Unemployment Duration in Canada," Journal of Labor Economics, University of Chicago Press, vol. 5(3), pages 325-53, July.
  20. Kostas G. Mavromaras & Chris D. Orme, 2004. "Temporary layoffs and split population models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(1), pages 49-67.
  21. Card, David & Levine, Phillip B., 2000. "Extended benefits and the duration of UI spells: evidence from the New Jersey extended benefit program," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 107-138, October.
  22. Lalive, Rafael & Zweimüller, Josef, 2002. "Benefit Entitlement and Unemployment Duration: The Role of Policy Endogeneity," CEPR Discussion Papers 3363, C.E.P.R. Discussion Papers.
  23. Elena Stancanelli, 1999. "Unemployment duration and the duration of entitlement to unemployment benefits: an empirical study for Britain," Applied Economics, Taylor & Francis Journals, vol. 31(9), pages 1043-1051.
  24. Lindeboom, Maarten & Theeuwes, Jules, 1993. "Search, Benefits and Entitlement," Economica, London School of Economics and Political Science, vol. 60(239), pages 327-46, August.
  25. Abbring, Jaap H., 2002. "Stayers versus defecting movers: a note on the identification of defective duration models," Economics Letters, Elsevier, vol. 74(3), pages 327-331, February.
  26. 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.
  27. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
  28. Tomi Kyyrä, 1999. "Post-Unemployment Wages and Economic Incentives to Exit from Unemployment," Research Reports 56, Government Institute for Economic Research Finland (VATT).
  29. Han, Aaron & Hausman, Jerry A, 1990. "Flexible Parametric Estimation of Duration and Competing Risk Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(1), pages 1-28, January-M.
  30. Stephen P. Jenkins & Carlos GarcÌa-Serrano, 2004. "The Relationship between Unemployment Benefits and Re-employment Probabilities: Evidence from Spain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(2), pages 239-260, 05.
  31. Reija Lilja, 1993. "Unemployment benefit system and unemployment duration in Finland," Finnish Economic Papers, Finnish Economic Association, vol. 6(1), pages 25-37, Spring.
  32. Micklewright, John & Nagy, Gyula, 1999. "Living standards and incentives in transition: the implications of UI exhaustion in Hungary," Journal of Public Economics, Elsevier, vol. 73(3), pages 297-319, September.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:fer:dpaper:400. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anita Niskanen)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.