Are there gains in employment stability by reducing unemployment benefit entitlement length? The case of Spain
Reliable empirical evidence about the effects of unemployment insurance benefits (UIB) on individuals’ labour market paths is crucial for designing appropriate labour market policies. In particular, medium and long-run effects of the UIB system can differ markedly from short-term impact when job stability depends on previous labour market history. This paper addresses the effect of the UIB entitlement length on employment stability by taking into account benefits endogeneity, dynamic selection issues and occurrence dependence. The analysis is undertaken for dual labour market, as the one in Spain, where temporary and permanent workers differ in quite many individual and labour market characteristics. We find that the UIB entitlement period lengthens the unemployment spell of all workers but it also has a positive effect on the quality of subsequent job matches, particularly for temporary workers, and when job entrance takes place by the end of benefits entitlement. We simulate alternative UIB designs and conclude that shortening the benefit entitlement length does not seem to lead to significant gains in overall employment stability which increases by 4.3% at most. But at the same time, we find that job turnover also increases so the overall effect is that workers are employed a bit more but at the expense of suffering more job interruptions.
|Date of creation:||Sep 2013|
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- Jan Boone & Jan Ours, 2012.
"Why is There a Spike in the Job Finding Rate at Benefit Exhaustion?,"
Springer, vol. 160(4), pages 413-438, December.
- Jan Boone & Jan C. van Ours, 2009. "Why is there a Spike in the Job Finding Rate at Benefit Exhaustion?," CESifo Working Paper Series 2840, CESifo Group Munich.
- Boone, J. & van Ours, J.C., 2009. "Why is There a Spike in the Job Finding Rate at Benefit Exhaustion?," Discussion Paper 2009-84, Tilburg University, Center for Economic Research.
- Boone, Jan & van Ours, Jan C, 2009. "Why is there a spike in the job finding rate at benefit exhaustion?," CEPR Discussion Papers 7525, C.E.P.R. Discussion Papers.
- Boone, Jan & van Ours, Jan C., 2009. "Why Is There a Spike in the Job Finding Rate at Benefit Exhaustion?," IZA Discussion Papers 4523, Institute for the Study of Labor (IZA).
- Juan J. Dolado & Salvador Ortigueira & Rodolfo Stucchi, 2016. "Does dual employment protection affect TFP? Evidence from Spanish manufacturing firms," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 7(4), pages 421-459, November.
- Stucchi, Rodolfo & Ortigueira, Salvador & Dolado, Juan José, 2011. "Does dual employment protection affect TFP? Evidence from Spanish manufacturing firms," UC3M Working papers. Economics we1137, Universidad Carlos III de Madrid. Departamento de Economía.
- Dolado, Juan J. & Ortigueira, Salvador & Stucchi, Rodolfo, 2012. "Does dual employment protection affect TFP? Evidence from Spanish manufacturing firms," CEPR Discussion Papers 8763, C.E.P.R. Discussion Papers.
- Gaure, Simen & Roed, Knut & Zhang, Tao, 2007. "Time and causality: A Monte Carlo assessment of the timing-of-events approach," Journal of Econometrics, Elsevier, vol. 141(2), pages 1159-1195, December.
- Gaure, Simen & Røed, Knut & Zhang, Tao, 2005. "Time and Causality: A Monte Carlo Assessment of the Timing-of-Events Approach," Memorandum 19/2005, Oslo University, Department of Economics.
- Green, David A & Riddell, W Craig, 1997. "Qualifying for Unemployment Insurance: An Empirical Analysis," Economic Journal, Royal Economic Society, vol. 107(440), pages 67-84, January. Full references (including those not matched with items on IDEAS)
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