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Workfare for the old and long-term unemployed

  • Bennmarker, Helge

    ()

    (IFAU)

  • Nordström Skans, Oskar

    ()

    (Uppsala Center for Labor Studies)

  • Vikman, Ulrika

    ()

    (Uppsala Center for Labor Studies)

We estimate the effects of conditioning benefits on program participation among older long-term unemployed workers. We exploit a Swedish reform which reduced UI duration from 90 to 60 weeks for a group of older unemployed workers in a setting where workers who ex-hausted their benefits received unchanged transfers if they agreed to participate in a work practice program. Our results show that job finding increased as a result of the shorter duration of passive benefits. The time profile of the job-finding effects suggests that the effects are due to deterrence effects during the program-entry phase. We find no evidence of wage reductions, suggesting that the increased job-finding rate was driven by increased search intensity rather than lower reservation wages.

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Paper provided by Uppsala University, Department of Economics in its series Working Paper Series, Center for Labor Studies with number 2012:8.

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Length: 34 pages
Date of creation: 11 Apr 2012
Date of revision:
Publication status: Published as Bennmarker, Helge, Oskar Nordström Skans and Ulrika Vikman, 'Workfare for the old and long-term unemployed' in Labour Economics, 2013, pages 25-34.
Handle: RePEc:hhs:uulswp:2012_008
Contact details of provider: Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
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