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Unemployment Insurance and Joblessness in Portugal


  • Pedro Portugal
  • John T. Addison


Using data from the Portuguese quarterly employment surveys, 1992-96, the present chapter examines the effect of unemployment insurance (UI) on escape rates from unemployment. The first concern is to identify the manner in which UI influences the time profile of these broad transitions. To this end, two different measures of UI are used, namely, receipt of benefits and time to benefit exhaustion. The second concern is to incorporate destination state into the analysis. Four such destination states are identified: full-time employment, part-time employment, "discouragement", and inactivity. The goal of the exercise is not merely to obtain to refined estimates of the effect of UI (and the other covariates) on unemployment but also to assist in the design of policy.

Suggested Citation

  • Pedro Portugal & John T. Addison, 1998. "Unemployment Insurance and Joblessness in Portugal," Working Papers w199804, Banco de Portugal, Economics and Research Department.
  • Handle: RePEc:ptu:wpaper:w199804

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    References listed on IDEAS

    1. Kiefer, Nicholas M & Neumann, George R, 1979. "An Empirical Job-Search Model, with a Test of the Constant Reservation-Wage Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 89-107, February.
    2. Jones, Stephen R G, 1989. "Reservation Wages and the Cost of Unemployment," Economica, London School of Economics and Political Science, vol. 56(222), pages 225-246, May.
    3. Addison, John T & Portugal, Pedro, 1989. "Job Displacement, Relative Wage Changes, and Duration of Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 281-302, July.
    4. John T. Addison & Pedro Portugal, 2003. "Unemployment Duration Competing and Defective Risks," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
    5. Lancaster, Tony & Chesher, Andrew, 1983. "An Econometric Analysis of Reservation Wages," Econometrica, Econometric Society, vol. 51(6), pages 1661-1676, November.
    6. Stephen R. G. Jones, 1988. "The Relationship Between Unemployment Spells and Reservation Wages as a Test of Search Theory," The Quarterly Journal of Economics, Oxford University Press, vol. 103(4), pages 741-765.
    7. Christopher J. Flinn, 1986. "Econometric Analysis of CPS-Type Unemployment Data," Journal of Human Resources, University of Wisconsin Press, vol. 21(4), pages 456-484.
    8. Lancaster, Tony, 1985. "Simultaneous equations models in applied search theory," Journal of Econometrics, Elsevier, vol. 28(1), pages 113-126, April.
    9. Eswar S Prasad, 2003. "What Determines the Reservation Wages of Unemployed Workers? New Evidence From German Micro Data," IMF Working Papers 03/4, International Monetary Fund.
    10. Gorter, Dirk & Gorter, Cees, 1993. "The Relation between Unemployment Benefits, the Reservation Wage and Search Duration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(2), pages 199-214, May.
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    Cited by:

    1. Olympia Bover & Ramón Gómez, 2004. "Another look at unemployment duration: exit to a permanent vs. a temporary job," Investigaciones Economicas, Fundación SEPI, vol. 28(2), pages 285-314, May.
    2. John T. Addison & Pedro Portugal, 2002. "Job search methods and outcomes," Oxford Economic Papers, Oxford University Press, vol. 54(3), pages 505-533, July.
    3. Jill Marie Gunderson & Julie L. Hotchkiss, 2004. "Job separation behavior of welfare recipients: results from a unique case study," FRB Atlanta Working Paper 2004-12, Federal Reserve Bank of Atlanta.
    4. Bell, Una Louise & Artola, Concha, 2001. "Identifying labour market dynamics using labour force survey data," ZEW Discussion Papers 01-44, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item

    JEL classification:

    • 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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