Benefit Entitlement and Unemployment Duration: The Role of Policy Endogeneity

By Rafael Lalive, Josef Zweimüller. Social Science Research Network, 2004

183 citations recorded by the source corpus.

The potential duration of benefits is generally viewed as an important determinant of unemployment duration. This paper evaluates a unique policy change that prolonged entitlement to regular unemployment benefits from 30 weeks to a maximum of 209 weeks for elderly individuals in certain regions of Austria. In the evaluation, we explicitly account for the fact that the program was an endogenous policy response to a crisis affecting individuals with severe labor market problems. The main results are: (i) REBP reduced the transition rate to jobs by 17 %; (ii) accounting for endogenous policy adoption is important and quantitatively significant.

Subfields: Demography, Economics and Econometrics, Gender Studies

View Paper: https://www.semanticscholar.org/paper/8bbff128ad8e56e9eb8a398218cf8f87ea30c56a

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Citations in the corpus

How Do Extended Benefits Affect Unemployment Duration? A Regression Discontinuity Approach (2008, unknown): “(6)Lalive et al. (2006) find that this is indeed the case for small benefit extensions.”
Unemployment Insurance in Europe: Unemployment Duration and Subsequent Employment Stability (2009, unknown): “Baker and Rea (1998) for Canada, and Jurajda (2002) for the US, look at the effect of future entitlement of UI on employment duration.”
How Shortening the Potential Duration of Unemployment Benefits Affects the Duration of Unemployment: Evidence from a Natural Experiment (2006, background): “Lalive and Zweimüller (2004) report a disincentive effect of about 0.4 day for Austrian benefit recipients.”
Too Old to Work, Too Young to Retire? (2017, background): “26See Winter-Ebmer (1998) or Lalive and Zweimüller (2004) for an analysis of these benefit extensions.”
How Changes in Financial Incentives Affect the Duration of Unemployment (2006, unknown): “This result lies within the range of previous findings regarding the effect of PBD on unemployment duration (see Section 2) and is also similar to the estimates of Lalive and Zweimüller (2004a) who find a disincentive effect of 0·05 weeks per additional week of PBD.”
Benefit Duration, Unemployment Duration and Job Match Quality: A Regression-Discontinuity Approach (2009, unknown): “Winter-Ebmer (1998) and Lalive and Zweimüller (2004) investigate the effect of an extended benefit period in Austria and find significant disincentive effects.”