The Effect of Receiving Supplementary UI Benefits on Unemployment Duration

31 Pages Posted: 19 Jan 2009

See all articles by Tomi Kyyrä

Tomi Kyyrä

VATT Institute for Economic Research

Pierpaolo Parrotta

Aarhus University - School of Business and Social Sciences

Michael Rosholm

Aarhus University - Department of Economics and Business Economics; IZA Institute of Labor Economics; Amternes og Kommunernes Forskningsinstitut (AKF)

Abstract

We consider the consequences of working part-time on supplementary unemployment insurance benefits in the Danish labour market. Following the timing-of-events approach we estimate causal effects of subsidized part-time work on the hazard rate out of unemployment insurance benefit receipt. We find evidence of a negative lock-in effect and a positive post-treatment effect, both of which vary across individuals. The resulting net effect on the expected unemployment duration is positive for some groups (e.g. married women) and negative for others (e.g. young workers).

Keywords: unemployment benefits, part-time work, lock-in effect, treatment effect, duration analysis

JEL Classification: C41, J65

Suggested Citation

Kyyrä, Tomi and Parrotta, Pierpaolo and Rosholm, Michael, The Effect of Receiving Supplementary UI Benefits on Unemployment Duration. IZA Discussion Paper No. 3920, Available at SSRN: https://ssrn.com/abstract=1329558 or http://dx.doi.org/10.2139/ssrn.1329558

Tomi Kyyrä (Contact Author)

VATT Institute for Economic Research ( email )

Arkadiankatu 7
Helsinki, 00101
Finland
+3583045542 (Phone)

HOME PAGE: http://www.vatt.fi

Pierpaolo Parrotta

Aarhus University - School of Business and Social Sciences ( email )

Nordre Ringgade 1
Aarhus C, DK-8000
Denmark

Michael Rosholm

Aarhus University - Department of Economics and Business Economics ( email )

Fuglesangs Allé 4
Aarhus V
Denmark
+45 89 42 15 59 (Phone)
+45 86 13 63 34 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Amternes og Kommunernes Forskningsinstitut (AKF)

Nyropsgade 37
Copenhagen, DK-1602
Denmark

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