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Switching from an inclining to a zero-level unemployment benefit profile: Good for work incentives?

Author

Listed:
  • Bart Cockx

  • Koen Declercq

  • Muriel Dejemeppe

  • Leda Inga
  • Bruno Van der Linden

Abstract

This paper evaluates the impact on the transition to work of a policy reform in Belgium that restricted the access to a specific unemployment insurance scheme for young labor market entrants. This scheme entitles youths with no or little labor market experience to unemployment benefits after a waiting period of one year. As of 2015, the Belgian government unexpectedly scrapped benefit eligibility for youths who start the waiting period at the age of 24 or older. The reform implied a change from an inclining to a flat rate (zero-level) benefit profile. We use a difference-in-differences approach to identify the causal impact of this reform on fresh university graduates. Our main finding is that this reform only increases the transition to very short-lived jobs.

Suggested Citation

  • Bart Cockx & Koen Declercq & Muriel Dejemeppe & Leda Inga & Bruno Van der Linden, 2020. "Switching from an inclining to a zero-level unemployment benefit profile: Good for work incentives?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 20/991, Ghent University, Faculty of Economics and Business Administration.
    • Handle: RePEc:rug:rugwps:20/991
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    Cited by:

    1. Cockx, B. & Declercq, Koen & Dejemeppe, Muriel, 2022. "Losing prospective entitlement to unemployment benefits. Impact on educational attainment," ROA Research Memorandum 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    2. Sam Desiere & Bart Cockx, 2021. "How Effective Are Hiring Subsidies to Reduce Long-Term Unemployment among Prime-Aged Jobseekers? Evidence from Belgium," CESifo Working Paper Series 9325, CESifo.
    3. Dávila, Dayana & Alvarado, Rafael, 2022. "Análisis del impacto de la Ley Orgánica para la Promoción del Trabajo Juvenil, Regulación Excepcional de la Jornada de Trabajo, Cesantía y Seguro de Desempleo, sobre el desempleo juvenil en Ecuador," MPRA Paper 113709, University Library of Munich, Germany.
    4. Bermúdez-Barrezueta, Natalia & Desiere, Sam & Tarullo, Giulia, 2025. "Hiring Subsidies and Temporary Work Agencies," IZA Discussion Papers 17616, Institute of Labor Economics (IZA).

    More about this item

    Keywords

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    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
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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