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Extended benefit entitlement periods and the duration of unemployment in West Germany

  • Steiner, Viktor
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    Germany1, as most other European countries, has been plagued by a persistently high level of long?term unemployment since the early 1980's. In contrast, long? term unemployment is much less of a problem in the United States. One potential reason for the different structure of unemployment relates to institutional differences in unemployment compensation systems. The German system is characterized by relatively high income?replacement ratios and extended benefit?entitlement periods which are often followed by the availability of open?ended unemployment or social assistance schemes. In contrast, unemployment insurance payments in the United States are terminated after about six months as a rule, and entitlement to subsequent welfare payments are only available to lone mothers and the disabled. Can these institutional differences explain the higher level of long?term unemployment in Germany relative to the United States?

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    Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 97-14.

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    Date of creation: 1997
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    Handle: RePEc:zbw:zewdip:5119
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    1. Wurzel,Eckhard, . "Staggered entry and unemployment durations - An application to german data," Discussion Paper Serie B 131, University of Bonn, Germany.
    2. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, vol. 28(1), pages 85-101, April.
    3. Bruce D. Meyer, 1988. "Unemployment Insurance And Unemployment Spells," NBER Working Papers 2546, National Bureau of Economic Research, Inc.
    4. 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.
    5. Lippman, Steven A & McCall, John J, 1976. "The Economics of Job Search: A Survey," Economic Inquiry, Western Economic Association International, vol. 14(3), pages 347-68, September.
    6. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-61, April.
    7. Moffitt, Robert & Nicholson, Walter, 1982. "The Effect of Unemployment Insurance on Unemployment: The Case of Federal Supplemental Benefits," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 1-11, February.
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