How Changes in Unemployment Benefit Duration Affect the Inflow into Unemployment

21 Pages Posted: 1 Feb 2010

See all articles by Jan C. van Ours

Jan C. van Ours

Tilburg University - Department of Economics; University of Melbourne - Department of Economics

Sander Tuit

Tilburg University - Center for Economic Research (CentER)

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Abstract

We study how changes in the maximum benefit duration affect the inflow into unemployment in the Netherlands. Until August 2003, workers who became unemployed after age 57.5 were entitled to unemployment benefits until the age of 65, after which they would receive old age pensions. This characteristic made it attractive for workers to enter unemployment shortly after age 57.5 rather than shortly before. Indeed, we find a peak in the inflow into unemployment for workers after age 57.5. From August 2003 onwards the maximum benefit durations were reduced. We find that shortly after 2003 the peak in the inflow disappeared.

Keywords: unemployment insurance, potential benefit duration, unemployment inflow

JEL Classification: H55, J64, J65

Suggested Citation

van Ours, Jan C. and Tuit, Sander, How Changes in Unemployment Benefit Duration Affect the Inflow into Unemployment. IZA Discussion Paper No. 4691. Available at SSRN: https://ssrn.com/abstract=1545118

Jan C. Van Ours (Contact Author)

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2880 (Phone)
+31 13 466 3042 (Fax)

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

Sander Tuit

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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