IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp3015.html
   My bibliography  Save this paper

The Effect of Sanctions on the Job Finding Rate: Evidence from Denmark

Author

Listed:
  • Svarer, Michael

    () (Aarhus University)

Abstract

This paper investigates the effect of sanctions of unemployment insurance benefits on the exit rate from unemployment for a sample of Danish unemployed. According to the findings are that even moderate sanctions have rather large effects. For both males and females the exit rate increases by more than 50% following imposition of a sanction. The paper exploits a rather large sample to elaborate on the basic findings. It is shown that harder sanctions have a larger effect, that the effect of sanctions wear out after around 3 months and that particular groups of unemployed are more responsive to sanctions than others. Finally, the analysis suggests that men react ex ante to the risk of being sanctioned in the sense that men who face higher sanction risk leave unemployment faster.

Suggested Citation

  • Svarer, Michael, 2007. "The Effect of Sanctions on the Job Finding Rate: Evidence from Denmark," IZA Discussion Papers 3015, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3015
    as

    Download full text from publisher

    File URL: http://ftp.iza.org/dp3015.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gerard J. van den Berg & Bas van der Klaauw, 2006. "Counseling And Monitoring Of Unemployed Workers: Theory And Evidence From A Controlled Social Experiment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 895-936, August.
    2. Jaap H. Abbring & Gerard J. Berg & Jan C. Ours, 2005. "The Effect of Unemployment Insurance Sanctions on the Transition Rate from Unemployment to Employment," Economic Journal, Royal Economic Society, vol. 115(505), pages 602-630, July.
    3. Jan Boone & Peter Fredriksson & Bertil Holmlund & Jan C. van Ours, 2007. "Optimal Unemployment Insurance with Monitoring and Sanctions," Economic Journal, Royal Economic Society, vol. 117(518), pages 399-421, March.
    4. Gerard J. van den Berg & Bas van der Klaauw & Jan C. van Ours, 2004. "Punitive Sanctions and the Transition Rate from Welfare to Work," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 211-241, January.
    5. Peter Fredriksson & Bertil Holmlund, 2006. "Optimal unemployment insurance design: Time limits, monitoring, or workfare?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(5), pages 565-585, September.
    6. Bart, COCKX & Muriel, DEJEMEPPE, 2007. "IIs the Notification of Monitoring a Threat to the Unemployed ? A Regression Discontinuity Approach," Discussion Papers (ECON - Département des Sciences Economiques) 2007016, Université catholique de Louvain, Département des Sciences Economiques.
    7. Jan Boone & Jan C. van Ours, 2006. "Modeling Financial Incentives to Get the Unemployed Back to Work," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 162(2), pages 227-252, June.
    8. Jan Boone & Jan C. van Ours, 2000. "Modeling Financial Incentives to Get Unemployed Back to Work," Econometric Society World Congress 2000 Contributed Papers 0973, Econometric Society.
    9. Rafael Lalive & Jan C. van Ours & Josef Zweimüller, 2005. "The Effect Of Benefit Sanctions On The Duration Of Unemployment," Journal of the European Economic Association, MIT Press, vol. 3(6), pages 1386-1417, December.
    10. Rosholm, Michael & Svarer, Michael, 2004. "Estimating the Threat Effect of Active Labour Market Programmes," IZA Discussion Papers 1300, Institute for the Study of Labor (IZA).
    11. Boone, Jan & Sadrieh, Abdolkarim & van Ours, Jan C., 2009. "Experiments on unemployment benefit sanctions and job search behavior," European Economic Review, Elsevier, vol. 53(8), pages 937-951, November.
    12. Cees Gorter & Guyonne R. J. Kalb, 1996. "Estimating the Effect of Counseling and Monitoring the Unemployed Using a Job Search Model," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 590-610.
    13. Gerard J. van den Berg & Bas van der Klaauw, 2005. "Job Search Monitoring and Sanctions," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(2), pages 26-29, 07.
    14. Van den Berg, Gerard J., 2001. "Duration models: specification, identification and multiple durations," Handbook of Econometrics,in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 55, pages 3381-3460 Elsevier.
    15. Abbring, Jaap H. & van den Berg, Gerard J., 2003. "A Simple Procedure for the Evaluation of Treatment Effects on Duration Variables," IZA Discussion Papers 810, Institute for the Study of Labor (IZA).
    16. Torben M. Andersen & Michael Svarer, 2007. "Flexicurity: Labour Market Performance in Denmark," CESifo Economic Studies, CESifo, vol. 53(3), pages 389-429, September.
    17. Jensen, Peter & Rosholm, Michael & Svarer, Michael, 2003. "The response of youth unemployment to benefits, incentives, and sanctions," European Journal of Political Economy, Elsevier, vol. 19(2), pages 301-316, June.
    18. Røed, Knut & Westlie, Lars, 2007. "Unemployment Insurance in Welfare States: Soft Constraints and Mild Sanctions," IZA Discussion Papers 2877, Institute for the Study of Labor (IZA).
    19. David Gray, 2003. "National Versus Regional Financing and Management of Unemployment and Related Benefits: The Case of Canada," OECD Social, Employment and Migration Working Papers 14, OECD Publishing.
    20. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The Nonparametric Identification of Treatment Effects in Duration Models," Econometrica, Econometric Society, vol. 71(5), pages 1491-1517, September.
    21. Dan A. Black & Jeffrey A. Smith & Mark C. Berger & Brett J. Noel, 2003. "Is the Threat of Reemployment Services More Effective Than the Services Themselves? Evidence from Random Assignment in the UI System," American Economic Review, American Economic Association, vol. 93(4), pages 1313-1327, September.
    22. Lars Pico Geerdsen, 2006. "Is there a Threat Effect of Labour Market Programmes? A Study of ALMP in the Danish UI System," Economic Journal, Royal Economic Society, vol. 116(513), pages 738-750, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. van der Klaauw, Bas & van Ours, Jan C, 2010. "Carrot and Stick: How Reemployment Bonuses and Benefit Sanctions Affect Job Finding Rates," CEPR Discussion Papers 7924, C.E.P.R. Discussion Papers.
    2. Patrick Arni & Rafael Lalive & Jan C. Van Ours, 2013. "How Effective Are Unemployment Benefit Sanctions? Looking Beyond Unemployment Exit," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(7), pages 1153-1178, November.
    3. Gerard J. Berg & Johan Vikström, 2014. "Monitoring Job Offer Decisions, Punishments, Exit to Work, and Job Quality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 116(2), pages 284-334, April.
    4. Stefanie Behncke & Markus Frölich & Michael Lechner, 2008. "A Caseworker Like Me - Does The Similarity Between Unemployed And Caseworker Increase Job Placements?," University of St. Gallen Department of Economics working paper series 2008 2008-08, Department of Economics, University of St. Gallen.
    5. Stefanie Behncke & Markus Frˆlich & Michael Lechner, 2010. "Unemployed and their caseworkers: should they be friends or foes?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 173(1), pages 67-92.
    6. Boss, Alfred & Christensen, Björn & Schrader, Klaus, 2010. "Die Hartz IV-Falle: Wenn Arbeit nicht mehr lohnt," Kiel Discussion Papers 474/475, Kiel Institute for the World Economy (IfW).
    7. McGuinness, Seamus & O'Connell, Philip J. & Kelly, Elish & Walsh, John R., 2011. "Activation in Ireland: An Evaluation of the National Employment Action Plan," Research Series, Economic and Social Research Institute (ESRI), number RS20.
    8. Michael Svarer, 2011. "Crime and partnerships," Review of Economics of the Household, Springer, vol. 9(3), pages 307-325, September.
    9. Ott Toomet, 2008. "Threat Effect Of The Labour Market Programs In Denmark: Evidence From A Quasi-Experiment," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 62, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    10. Kyyrä, Tomi & Parrotta, Pierpaolo & Rosholm, Michael, 2013. "The effect of receiving supplementary UI benefits on unemployment duration," Labour Economics, Elsevier, vol. 21(C), pages 122-133.
    11. Barbara Hofmann, 2008. "Work Incentives? Ex Post Effects of Unemployment Insurance Sanctions - Evidence from West Germany," CESifo Working Paper Series 2508, CESifo Group Munich.
    12. Almeida, Rita & Arbelaez, Juliana & Honorati, Maddalena & Kuddo, Arvo & Lohmann, Tanja & Ovadiya, Mirey & Pop, Lucian & Puerta, Maria Laura Sanchez & Weber, Michael, 2012. "Improving access to jobs and earnings opportunities : the role of activation and graduation policies in developing countries," Social Protection and Labor Policy and Technical Notes 67610, The World Bank.
    13. McGuinness, Seamus & O'Connell, Philip J. & Kelly, Elish, 2011. "Carrots without Sticks: The Impacts of Job Search Assistance in a Regime with Minimal Monitoring and Sanctions," Papers WP409, Economic and Social Research Institute (ESRI).
    14. Bernhard Boockmann & Stephan Thomsen & Thomas Walter, 2009. "Intensifying the Use of Benefit Sanctions – An Effective Tool to Shorten Welfare Receipt and Speed up Transitions to Employment?," IAW Discussion Papers 56, Institut für Angewandte Wirtschaftsforschung (IAW).
    15. Torben M. Andersen & Michael Svarer, 2007. "Flexicurity: Labour Market Performance in Denmark," CESifo Economic Studies, CESifo, vol. 53(3), pages 389-429, September.

    More about this item

    Keywords

    unemployment hazard; sanctions;

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp3015. 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: (Mark Fallak). General contact details of provider: http://www.iza.org .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.