Unemployment Duration, Benefit Duration and the Business Cycle
CEMFI Working Paper No. 9717
Posted: 16 May 1998
Date Written: 1997
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: Suggested Citation