Six Ways to Leave Unemployment

27 Pages Posted: 4 Aug 2008

See all articles by John T. Addison

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics; IZA Institute of Labor Economics

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Abstract

This paper uses a unique Portuguese dataset to examine the effect of access to unemployment benefits (UBs) and their maximum potential duration on escape rates from unemployment. In examining the time profile of transitions out of unemployment, the principal contributions of the paper are twofold. First, it provides a detailed state space of potential outcomes: open-ended employment, fixed-term contracts, part-time work, government-provided jobs, self employment, and labour force withdrawal. Second, it is able to exploit major exogenous discontinuities in the maximum duration of unemployment benefits to identify disincentive effects. While confirming strong disincentive effects, it is shown that use of an aggregate hazard function regression model compounds very different and even contradictory effects of the determinants of unemployment.

Suggested Citation

Addison, John T., Six Ways to Leave Unemployment. Scottish Journal of Political Economy, Vol. 55, Issue 4, pp. 393-419, September 2008. Available at SSRN: https://ssrn.com/abstract=1184113 or http://dx.doi.org/10.1111/j.1467-9485.2008.00459.x

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics ( email )

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IZA Institute of Labor Economics

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