How Changes in Benefits Entitlement Affect the Duration of Unemployment
CentER Discussion Paper No. 2005-30
32 Pages Posted: 5 Apr 2005
Date Written: February 2005
This paper investigates the disincentive effects of the potential duration of unemployment insurance (UI) benefits. The disincentive effects are identified by exploiting changes in the UI system in Slovenia, which involved substantial reductions in the potential benefit duration and had characteristics of a natural experiment. We find that the change had a positive effect on the exit rate out of unemployment - both to employment and to other destinations - at various durations of unemployment spells and for many categories of unemployed workers.
Keywords: Unemployment insurance, potential benefit duration, job finding rates
JEL Classification: C41, H55, J64, J65
Suggested Citation: Suggested Citation