Does an Increase in Unemployment Income Lead to Longer Unemployment Spells? Evidence Using Danish Unemployment Assistance Data

Ott-Siim Toomet ()

No 2005-09, Bank of Estonia Working Papers from Bank of Estonia

Abstract: Danish unemployment assistance depends on age; it increases by 70% when unemployed individuals turn 25. This feature is used to identify the impact of income on the unemployment-to-employment hazard rate. A mixed proportional hazard framework based on a 10% representative Danish registry data set is used. The results indicate that the income effect for females is negative and significant, corresponding to an income elasticity of -0.4. The effect for males is positive but insignificant.

Keywords: welfare benefits; incentive effect; unemployment duration (search for similar items in EconPapers)
JEL-codes: J64 J65 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: 2005-10-10, Revised 2005-10-10
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