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The Displacement Effect of Reemployment Bonus Programs

Author

Listed:
  • Carl Davidson

    (Michigan State University)

  • Stephen A. Woodbury

    (W.E. Upjohn Institute for Employment Research)

Abstract

The authors develop a partial equilibrium matching model of the labor market in order to examine whether adoption of a reemployment bonus would displace workers not offered the bonus. They examine the displacement effect for (1) unemployment-insurance-eligible workers who are offered but do not find a job in time to qualify for a bonus and (2) unemployment-insurance-ineligible workers who are never offered a bonus. The model predicts minimal displacement of the former group. But for the latter group, the model predicts an increase in unemployment duration of 0.2-0.4 week and an increase in unemployment of up to two per thousand. Copyright 1993 by University of Chicago Press.
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(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Carl Davidson & Stephen A. Woodbury, 1990. "The Displacement Effect of Reemployment Bonus Programs," Upjohn Working Papers 90-02, W.E. Upjohn Institute for Employment Research.
    • Handle: RePEc:upj:weupjo:90-02
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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