Welfare state stabilization of employment careers: Unenployement benefits and job histories in the United States and West Germany
Economic job search theory offers two complementary predictions about the effects of unemployment benefits on job search outcomes among unemployed workers. By raising workers' reservation wages, unemployment benefits should contribute to both prolonged spell duration and improved post-unemployment job quality. In contrast to many previous empirical studies that have addressed the negative benefit effect on duration only, the current paper jointly addresses the causal effect of unemployment benefits on both unemployment duration and post-unemployment job quality. Based on discrete-time event history methods and U.S. and German panel data for the 1980s and 1990s, the paper establishes empirical support for both types of benefit effects in both countries. Hence, the effect of unemployment benefits on employment careers is more appropriately described as career stabilization induced by welfare state provision of job search resources. Against some prolongation of unemployment spells, unemployment benefits effectively enable workers to maintain previously accumulated human capital by fostering adequate reemployment in terms of earnings, occupations, or job duration. Consistent with this view, unemployment benefits turn out as particularly effective in preventing severe losses in postunemployment job quality, but also in terms of maintaining job qua lity among highskill workers. Through these effects of benefits on job histories, cross-national differences in welfare state generosity also assume an important role in explaining U.S.-German differences in terms of unemployment dynamics.
|Date of creation:||2002|
|Contact details of provider:|| Postal: Reichpietschufer 50, 10785 Berlin, Germany|
Phone: ++49 - 30 - 25491 - 0
Fax: ++49 - 30 - 25491 - 684
Web page: http://www.wzb.eu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Addison, John T. & Blackburn, McKinley L., 2000. "The effects of unemployment insurance on postunemployment earnings," Labour Economics, Elsevier, vol. 7(1), pages 21-53, January.
- Katharine G. Abraham & Susan N. Houseman, 1993. "Job Security in America: Lessons from Germany," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number kagsnh1993.
- Schömann, Klaus & Flechtner, Stefanie & Mytzek, Ralf & Schömann, Isabelle, 2000. "Moving towards employment insurance: Unemployment insurance and employment protection in the OECD," Discussion Papers, Research Unit: Labor Market Policy and Employment FS I 00-201, Social Science Research Center Berlin (WZB).
- Katz, Lawrence F. & Meyer, Bruce D., 1990.
"The impact of the potential duration of unemployment benefits on the duration of unemployment,"
Journal of Public Economics,
Elsevier, vol. 41(1), pages 45-72, February.
- Lawrence F. Katz & Bruce D. Meyer, 1988. "The Impact of the Potential Duration of Unemployment Benefits on the Duration of Unemployment," Working Papers 621, Princeton University, Department of Economics, Industrial Relations Section..
- 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.
- Bruce C. Fallick, 1996. "A Review of the Recent Empirical Literature on Displaced Workers," ILR Review, Cornell University, ILR School, vol. 50(1), pages 5-16, October.
- Bruce C. Fallick, 1995. "A review of the recent empirical literature on displaced workers," Finance and Economics Discussion Series 95-14, Board of Governors of the Federal Reserve System (U.S.).
- Belzil, Christian, 2000. "Unemployment Insurance and Subsequent Job Duration: Job Matching vs Unobserved Heterogeneity," IZA Discussion Papers 116, Institute for the Study of Labor (IZA).
- Christian Belzil, 2001. "Unemployment Insurance and Subsequent Job Duration: Job Matching vs Unobserved Heterogeneity," CIRANO Working Papers 2001s-21, CIRANO.
- Blau, David M. & Robins, Philip K., 1986. "Job search, wage offers, and unemployment insurance," Journal of Public Economics, Elsevier, vol. 29(2), pages 173-197, March.
- Steiner, Viktor, 1997. "Extended benefit entitlement periods and the duration of unemployment in West Germany," ZEW Discussion Papers 97-14, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Narendranathan, W & Nickell, S & Stern, J, 1985. "Unemployment Benefits Revisited," Economic Journal, Royal Economic Society, vol. 95(378), pages 307-329, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:zbw:wzblpe:fsi02207. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.