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How Do Different Entitlements to Unemployment Benefits Affect the Transitions from Unemployment into Employment?

  • John T. Addison
  • Pedro Portugal

In Portugal duration of benefits is exclusively age determined while replacement rates are to all intents and purposes uniform. We exploit differences in potential maximum duration of benefits for nearly matched pairs of individuals who differ in age by one year and in potential maximum duration of benefits by three months. In specifications that take account of unobserved individual heterogeneity, while controlling for pure age effects on escape rates, we find that lower maximum benefit duration is associated with substantially higher quarterly rates of job finding in the range 53 to 106 per cent.

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File URL: http://www.bportugal.pt/en-US/BdP%20Publications%20Research/WP200711.pdf
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Paper provided by Banco de Portugal, Economics and Research Department in its series Working Papers with number w200711.

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Date of creation: 2007
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Handle: RePEc:ptu:wpaper:w200711
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  1. Pedro Portugal & Olivier Blanchard, 2001. "What Hides Behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets," American Economic Review, American Economic Association, vol. 91(1), pages 187-207, March.
  2. David Card & Raj Chetty & Andrea Weber, 2007. "The Spike at Benefit Exhaustion: Leaving the Unemployment System or Starting a New Job?," NBER Working Papers 12893, National Bureau of Economic Research, Inc.
  3. Carling, Kenneth & Edin, Per-Anders & Harkman, Anders & Holmlund, Bertil, 1996. "Unemployment duration, unemployment benefits, and labor market programs in Sweden," Journal of Public Economics, Elsevier, vol. 59(3), pages 313-334, March.
  4. Bruce D. Meyer, 1988. "Unemployment Insurance And Unemployment Spells," NBER Working Papers 2546, National Bureau of Economic Research, Inc.
  5. Rafael Lalive & Jan C. van Ours & Josef Zweimüller, 2004. "How Changes in Financial Incentives Affect the Duration of Unemployment," CESifo Working Paper Series 1337, CESifo Group Munich.
  6. John T. Addison & Pedro Portugal, 2000. "Unemployment Duration: Competing and Defective Risks," Working Papers w200001, Banco de Portugal, Economics and Research Department.
  7. Peter Schmidt & Ann Dryden Witte, 1987. "Predicting Criminal Recidivism Using "Split Population" Survival Time Models," NBER Working Papers 2445, National Bureau of Economic Research, Inc.
  8. Lawrence F. Katz & Bruce D. Meyer, 1988. "The Impact of the Potential Duration of Unemployment Benefits on the Duration of Unemployment," NBER Working Papers 2741, National Bureau of Economic Research, Inc.
  9. Card, David & Levine, Phillip B., 2000. "Extended benefits and the duration of UI spells: evidence from the New Jersey extended benefit program," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 107-138, October.
  10. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
  11. Pedro Portugal & John T. Addison, 2008. "Six Ways To Leave Unemployment," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(4), pages 393-419, 09.
  12. Dale T. Mortensen, 1977. "Unemployment insurance and job search decisions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 30(4), pages 505-517, July.
  13. 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.
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