Modelling Financial Incentives To Get Unemployed Back To Work

Jan van Ours and Jan Boone

No 2361, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We model how unemployment benefit sanctions - benefit reductions that are imposed if unemployed do not comply with job search guidelines - affect unemployment. In our analysis we find that not only micro-effects concerning the behaviour of individual unemployed workers are relevant, but also macro-spillover effects from the additional creation of vacancies, which originates from the increased effectiveness of labour supply. We advocate that for a given loss in welfare for the unemployed benefit sanctions are more effective in reducing unemployment than an across the board reduction in the replacement rate.

Keywords: Financial incentives; Sanctions; Unemployment benefits (search for similar items in EconPapers)
JEL-codes: H55 J65 J68 (search for similar items in EconPapers)
Date: 2000-01
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Modeling Financial Incentives to Get the Unemployed Back to Work (2006)
Working Paper: Modeling Financial Incentives to Get Unemployed Back to Work (2000)
Working Paper: Modeling Financial Incentives to Get Unemployed Back to Work (2000)
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