Unemployment Duration, Benefit Duration and the Business Cycle

Manuel Arellano (), Samuel Bentolila () and Olympia Bover ()

No 1840, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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 1987–94. Estimated discrete hazard models indicate that receipt of unemployment benefits significantly reduces the hazard of leaving unemployment. For instance, at durations of three months, the hazard for workers without benefits is twice as large as that for workers with benefits. Favourable business conditions increase the hazard of leaving unemployment. At sample-period magnitudes, this effect is significantly smaller than that of benefit receipt.

Keywords: Business Cycle; Unemployment Benefits; Unemployment Duration (search for similar items in EconPapers)
JEL-codes: E32 J64 J65 (search for similar items in EconPapers)
Date: 1998-03
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Related works:
Journal Article: Unemployment Duration, Benefit Duration and the Business Cycle (2002)
Working Paper: Unemployment Duration, Benefit Duration, and the Business Cycle (1997)
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