Base Period, Qualifying Period and the Equilibrium Rate of Unemployment

45 Pages Posted: 13 Jun 2006

See all articles by Elke J. Jahn

Elke J. Jahn

Institute for Employment Research (IAB); University of Bayreuth; IZA Institute of Labor Economics

Thomas Wagner

University of Applied Sciences Nurnberg

Date Written: May 2006

Abstract

Unemployment benefits, benefit duration, base period and qualifying period are constituent parameters of the unemployment insurance system in most OECD countries. From economic research we know that the amount and duration of unemployment benefits increase unemployment. To analyze the effects of the other two parameters we use a matching model with search frictions and show that there is a trade-off between the qualifying and the base period on the one hand and the amount and duration of the unemployment benefits on the other. A country that combines a high level of unemployment benefits with a long benefit duration can neutralize the effect on the equilibrium rate of unemployment with a long qualifying and/or a short base period.

Keywords: matching model, unemployment insurance, base period, qualifying period

JEL Classification: J41, J64, J68

Suggested Citation

Jahn, Elke J. and Wagner, Thomas, Base Period, Qualifying Period and the Equilibrium Rate of Unemployment (May 2006). Available at SSRN: https://ssrn.com/abstract=908234 or http://dx.doi.org/10.2139/ssrn.908234

Elke J. Jahn (Contact Author)

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

University of Bayreuth ( email )

Bayreuth, 95447
Germany

IZA Institute of Labor Economics ( email )

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

Thomas Wagner

University of Applied Sciences Nurnberg ( email )

90489 Nurenberg
Germany

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