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How Do Extended Benefits Affect Unemployment Duration? A Regression Discontinuity Approach

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  • Lalive, Rafael

    (University of Lausanne)

Abstract

This paper studies a program that extends the maximum duration of unemployment benefits from 30 weeks to 209 weeks. Interestingly, this program is targeted to individuals aged 50 years or older, living in certain eligible regions in Austria. In the evaluation, I use sharp discontinuities in treatment assignment at age 50 and at the border between eligible regions and control regions to identify the effect of extended benefits on unemployment duration. Results indicate that the duration of job search is prolonged by at least .09 weeks per additional week of benefits among men, whereas unemployment duration increases by at least .32 weeks per additional week of benefits among women. The salient differences between men and women are consistent with the lower minimum age for early retirement applying to women.

Suggested Citation

  • Lalive, Rafael, 2006. "How Do Extended Benefits Affect Unemployment Duration? A Regression Discontinuity Approach," IZA Discussion Papers 2200, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2200
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    More about this item

    Keywords

    unemployment duration; benefit duration; regression discontinuity; early retirement;
    All these keywords.

    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

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