Unemployment Duration, Benefit Duration and the Business Cycle

CEMFI Working Paper No. 9717

Posted: 16 May 1998

See all articles by Olympia Bover

Olympia Bover

Banco de España - Research Department; Centre for Economic Policy Research (CEPR)

Manuel Arellano

CEMFI

Samuel Bentolila

Centro de Estudios Monetarios y Financieros (CEMFI); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 2 versions of this paper

Date Written: 1997

Abstract

In this paper we study the effects of unemployment benefit duration and the business cycle on unemployment duration. We construct durations for individuals entering unemployment from a longitudinal sample of Spanish men in 1987-1994. Estimated discrete hazard models indicate that receipt of unemployment benefits significantly reduces the hazard of leaving unemployment. For instance, at durations of 3 months, the hazard for workers without benefits is twice as large as that for workers with benefits. Favorable business conditions increase the hazard of leaving unemployment. At sample-period magnitudes, this effect is significantly smaller than that of benefit receipt.

JEL Classification: J64, J65, E32

Suggested Citation

Bover, Olympia and Arellano, Manuel and Bentolila, Samuel, Unemployment Duration, Benefit Duration and the Business Cycle (1997). CEMFI Working Paper No. 9717. Available at SSRN: https://ssrn.com/abstract=88328

Olympia Bover

Banco de España - Research Department ( email )

Alcala 50
28014 Madrid
Spain
+34 91 338 5979 (Phone)
+34 91 338 5678 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Manuel Arellano

CEMFI ( email )

Casado del Alisal 5
28014 Madrid
Spain
+34 91 429 0551 (Phone)
+34 91 429 1056 (Fax)

Samuel Bentolila (Contact Author)

Centro de Estudios Monetarios y Financieros (CEMFI) ( email )

Casado del Alisal 5
28014 Madrid
Spain
+34 91 429 0551 (Phone)
+34 91 429 1056 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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