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Reforming the Benefit System to 'Make Work Pay': Options and Priorities in a Weak Labour Market

  • Immervoll, Herwig

    ()

    (World Bank)

Policies that support the unemployed, while reducing employment barriers and benefit dependency, are of particular interest in the current economic climate. This paper examines alternative policy approaches for combining adequate income support for the jobless with incentives to keep out-of-work spells short. After summarising the main parameters of existing income support measures for the unemployed in EU and OECD countries, I review evidence on the economic relevance of work incentives and discuss their significance when labour markets are weak during and after an economic downturn. Based on the available evidence, I propose a set of policy priorities to strengthen both the "protection" and the "promotion" functions of unemployment support.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Policy Papers with number 50.

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Length: 27 pages
Date of creation: Nov 2012
Date of revision:
Handle: RePEc:iza:izapps:pp50
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  1. Immervoll, Herwig & Pearson, Mark, 2009. "A Good Time for Making Work Pay? Taking Stock of In-Work Benefits and Related Measures across the OECD," IZA Policy Papers 3, Institute for the Study of Labor (IZA).
  2. Petrongolo, Barbara, 2008. "The long-term effects of job search requirements: Evidence from the UK JSA reform," CEPR Discussion Papers 7067, C.E.P.R. Discussion Papers.
  3. Camille Landais & Pascal Michaillat & Emmanuel Saez, 2011. "Optimal Unemployment Insurance Over the Business Cycle," CEP Discussion Papers dp1078, Centre for Economic Performance, LSE.
  4. Carling, Kenneth & Holmlund, Bertil & Vejsiu, Altin, 1999. "Do Benefit Cuts Boost Job Findings? Swedish Evidence from the 1990s," Working Paper Series 1999:20, Uppsala University, Department of Economics.
  5. Jesse Rothstein, 2012. "The Labor Market Four Years Into the Crisis: Assessing Structural Explanations," NBER Working Papers 17966, National Bureau of Economic Research, Inc.
  6. Marco Caliendo & Konstantinos Tatsiramos & Arne Uhlendorff, 2013. "Benefit Duration, Unemployment Duration And Job Match Quality: A Regression‐Discontinuity Approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(4), pages 604-627, 06.
  7. 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.
  8. Peter Fredriksson & Bertil Holmlund, 2006. "Improving Incentives in Unemployment Insurance: A Review of Recent Research," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 357-386, 07.
  9. Jesse Rothstein, 2011. "Unemployment Insurance and Job Search in the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 43(2 (Fall)), pages 143-213.
  10. Herwig Immervoll & Henrik Jacobsen Kleven & Claus Thustrup Kreiner & Emmanuel Saez, 2007. "Welfare reform in European countries: a microsimulation analysis," Economic Journal, Royal Economic Society, vol. 117(516), pages 1-44, 01.
  11. Holmlund, B., 1997. "Unemployment Insurance in Theory and Practice," CEPR Discussion Papers 380, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  12. Kahn, Lisa B., 2010. "The long-term labor market consequences of graduating from college in a bad economy," Labour Economics, Elsevier, vol. 17(2), pages 303-316, April.
  13. David Grubb & Shruti Singh & Peter Tergeist, 2009. "Activation Policies in Ireland," OECD Social, Employment and Migration Working Papers 75, OECD Publishing.
  14. Konstantinos Tatsiramos, 2009. "Unemployment Insurance in Europe: Unemployment Duration and Subsequent Employment Stability," Journal of the European Economic Association, MIT Press, vol. 7(6), pages 1225-1260, December.
  15. Bargain, Olivier & Orsini, Kristian & Peichl, Andreas, 2011. "Labor Supply Elasticities in Europe and the US," IZA Discussion Papers 5820, Institute for the Study of Labor (IZA).
  16. Virginia Hernanz & Franck Malherbet & Michele Pellizzari, 2004. "Take-Up of Welfare Benefits in OECD Countries: A Review of the Evidence," OECD Social, Employment and Migration Working Papers 17, OECD Publishing.
  17. Michiel Evers & Ruud Mooij & Daniel Vuuren, 2008. "The Wage Elasticity of Labour Supply: A Synthesis of Empirical Estimates," De Economist, Springer, vol. 156(1), pages 25-43, March.
  18. Danielle Venn, 2012. "Eligibility Criteria for Unemployment Benefits: Quantitative Indicators for OECD and EU Countries," OECD Social, Employment and Migration Working Papers 131, OECD Publishing.
  19. Philip Oreopoulos & Till von Wachter & Andrew Heisz, 2006. "The Short- and Long-Term Career Effects of Graduating in a Recession: Hysteresis and Heterogeneity in the Market for College Graduates," NBER Working Papers 12159, National Bureau of Economic Research, Inc.
  20. Mário Centeno, 2004. "The Match Quality Gains from Unemployment Insurance," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
  21. Johannes F. Schmieder & Till von Wachter & Stefan Bender, 2012. "The Effects of Extended Unemployment Insurance Over the Business Cycle: Evidence from Regression Discontinuity Estimates Over 20 Years," The Quarterly Journal of Economics, Oxford University Press, vol. 127(2), pages 701-752.
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