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Intergenerational Influences on the Receipt of Unemployment Insurance in Canada and Sweden

Author

Listed:
  • Corak, Miles

    (CUNY Graduate Center)

  • Gustafsson, Björn Anders

    (Göteborg University)

  • Österberg, Torun

    (University of Gothenburg)

Abstract

The objective of this paper is to examine the extent to which an individual’s use of unemployment insurance (UI) as a young adult is influenced by past experience with the program, and by having had a parent who also collected UI. A major methodological challenge is to determine the extent to which the intergenerational correlation of UI status is "spurious" or causal. Both the time to a first UI claim and the entire sequence of claims over an extended period are examined using two alternative ways of controlling for unobserved heterogeneity. The analysis is based upon longitudinal data on a cohort of young Canadian and Swedish men. It is found that parental use of UI shortens the time to a first UI claim in Canada, but not in Sweden. Subsequent participation in the Canadian program is influenced by parental UI history. In Sweden individual learning through past participation in UI - not family background - is the dominant avenue determining repeated participation.

Suggested Citation

  • Corak, Miles & Gustafsson, Björn Anders & Österberg, Torun, 2000. "Intergenerational Influences on the Receipt of Unemployment Insurance in Canada and Sweden," IZA Discussion Papers 184, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp184
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    References listed on IDEAS

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    1. Miles Corak & Andrew Heisz, 1999. "The Intergenerational Earnings and Income Mobility of Canadian Men: Evidence from Longitudinal Income Tax Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 504-533.
    2. Miles Corak, 1993. "Unemployment Insurance Once Again: The Incidence of Repeat Participation in the Canadian UI Program," Canadian Public Policy, University of Toronto Press, vol. 19(2), pages 162-176, June.
    3. O'Neill, Donal & Sweetman, Olive, 1998. "Intergenerational Mobility in Britain: Evidence from Unemployment Patterns," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(4), pages 431-447, November.
    4. Gary S. Becker & Casey B. Mulligan, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(3), pages 729-758.
    5. Bruce D. Meyer & Dan T. Rosenbaum, "undated". "Repeat Use of Unemployment Insurance," IPR working papers 95-24, Institute for Policy Resarch at Northwestern University.
    6. Lars Ljungqvist & Thomas J. Sargent, 1998. "The European Unemployment Dilemma," Journal of Political Economy, University of Chicago Press, vol. 106(3), pages 514-550, June.
    7. Lindbeck, Assar, 1995. "Hazardous Welfare-State Dynamics," American Economic Review, American Economic Association, vol. 85(2), pages 9-15, May.
    8. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-1035, December.
    9. Gottschalk, Peter, 1996. "Is the correlation in welfare participation across generations spurious?," Journal of Public Economics, Elsevier, vol. 63(1), pages 1-25, December.
    10. 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.
    11. Heckman, James J & Borjas, George J, 1980. "Does Unemployment Cause Future Unemployment? Definitions, Questions and Answers from a Continuous Time Model of Heterogeneity and State Dependence," Economica, London School of Economics and Political Science, vol. 47(187), pages 247-283, August.
    12. Sara McLanahan, 1988. "Family structure and dependency: Early transitions to female household headship," Demography, Springer;Population Association of America (PAA), vol. 25(1), pages 1-16, February.
    13. Miles Corak, 1993. "Is Unemployment Insurance Addictive? Evidence from the Benefit Durations of Repeat Users," ILR Review, Cornell University, ILR School, vol. 47(1), pages 62-72, October.
    14. Lemieux, Thomas & MacLeod, W. Bentley, 2000. "Supply side hysteresis: the case of the Canadian unemployment insurance system," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 139-170, October.
    15. O'Neill, Donal & Sweetman, Olive, 1998. "Intergenerational Mobility in Britain: Evidence from Unemployment Patterns," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(4), pages 431-447, November.
    16. Patricia M. Anderson & Bruce D. Meyer, 1993. "The Unemployment Insurance Payroll Tax and Interindustry and Interfirm Subsidies," NBER Chapters, in: Tax Policy and the Economy, Volume 7, pages 111-144, National Bureau of Economic Research, Inc.
    17. Glenn Ellison & Drew Fudenberg, 1995. "Word-of-Mouth Communication and Social Learning," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(1), pages 93-125.
    18. P. B. Levine & D. J. Zimmerman, "undated". "The intergenerational correlation in AFDC participation: Welfare trap or poverty trap?," Institute for Research on Poverty Discussion Papers 1100-96, University of Wisconsin Institute for Research on Poverty.
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    Citations

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    Cited by:

    1. Grady, Patrick & Kapsalis, Constantine, 2002. "The Approach to Seasonal Unemployment in the Nordic Countries: A Comparison with Canada," MPRA Paper 2991, University Library of Munich, Germany.
    2. Ekhaugen, Tyra, 2005. "Extracting the causal component from the intergenerational correlation in unemployment," Memorandum 21/2005, Oslo University, Department of Economics.
    3. Beaulieu, Nicolas & Duclos, Jean-Yves & Fortin, Bernard & Rouleau, Manon, 2001. "An Econometric Analysis of Intergenerational Reliance on Social Assistance," Cahiers de recherche 0116, Université Laval - Département d'économique.
    4. Orsetta Causa & Catherine Chapuis, 2009. "Equity in Student Achievement Across OECD Countries: An Investigation of the Role of Policies," OECD Economics Department Working Papers 708, OECD Publishing.
    5. Miles Corak, 2001. "Are the Kids All Right? Intergenerational Mobility and Child Well-being in Canada," The Review of Economic Performance and Social Progress, in: Andrew Sharpe, Executive Director & France St-Hilaire, Vice-President , Research & Keith Banting, Di (ed.), The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s, volume 1, Centre for the Study of Living Standards;The Institutute for Research on Public Policy.

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    More about this item

    Keywords

    Unemployment insurance; intergenerational mobility; unemployment;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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