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

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  • Steiner, Viktor

Abstract

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?

Suggested Citation

  • 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.
  • Handle: RePEc:zbw:zewdip:5119
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    1. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
    2. 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.
    3. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-161, April.
    4. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, vol. 28(1), pages 85-101, April.
    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 347-368, September.
    6. 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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