IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Disincentive Effects of Unemployment Benefits and the Role of Caseworkers

Listed author(s):
  • Schmieder, Johannes F.

    ()

    (Boston University)

  • Trenkle, Simon

    ()

    (Institute for Employment Research (IAB), Nuremberg)

A large literature has documented that the unemployment duration of unemployed individuals increases with the generosity of the unemployment insurance (UI) system, which has been interpreted as the disincentive effect of UI benefits. However, unemployed workers typically also have caseworkers assigned who are monitoring and assisting the job search efforts. These caseworkers may respond to differences in UI eligibility by shifting resources (financial or time) between unemployed individuals in order to counteract the moral hazard effect of UI benefits or to focus resources to where they have the largest effect. Depending on the motivations of the caseworker, the effectiveness of caseworker resources and the complementarity between these resources and UI benefits, the typical estimates of the disincentive effects of UI may be biased upwards or downwards in studies that compare workers within the same UI agency. We estimate whether caseworkers respond to the generosity of UI eligibility using a sharp regression discontinuity (RD) design in Germany, where potential UI durations vary with age. We show that across a wide variety of measures, including training programs, wage subsidies, personal meetings and sanctions, UI caseworkers do not treat unemployed with different eligibility differently. At best we find a very small effect that workers with shorter eligibility close to the exhaustion point are more likely to be assigned to training programs that prolong their UI eligibility. The typical RD estimates of the UI disincentive effects thus seem to be valid estimates.

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://ftp.iza.org/dp9868.pdf
Download Restriction: no

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 9868.

as
in new window

Length: 41 pages
Date of creation: Apr 2016
Handle: RePEc:iza:izadps:dp9868
Contact details of provider: Postal:
IZA, P.O. Box 7240, D-53072 Bonn, Germany

Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information: Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
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. David Card & Jochen Kluve & Andrea Weber, 2010. "Active Labour Market Policy Evaluations: A Meta-Analysis," Economic Journal, Royal Economic Society, vol. 120(548), pages 452-477, November.
  2. David Card & Andrew Johnston & Pauline Leung & Alexandre Mas & Zhuan Pei, 2015. "The Effect of Unemployment Benefits on the Duration of Unemployment Insurance Receipt: New Evidence from a Regression Kink Design in Missouri, 2003-2013," American Economic Review, American Economic Association, vol. 105(5), pages 126-130, May.
  3. Annette Bergemann, 2011. "The threat effect of participation in active labor market programs on job search behavior of migrants in Germany," International Journal of Manpower, Emerald Group Publishing, vol. 32(7), pages 777-795, October.
  4. Eichhorst, Werner & Marx, Paul, 2009. "Reforming German Labor Market Institutions: A Dual Path to Flexibility," IZA Discussion Papers 4100, Institute for the Study of Labor (IZA).
  5. Andrew C. Johnston & Alexandre Mas, 2015. "Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut," Working Papers 590, Princeton University, Department of Economics, Industrial Relations Section..
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:iza:izadps:dp9868. 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)

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.