How Does the Unemployment Insurance System Shape the Time Profile of Jobless Duration?

John Addison and Pedro Portugal ()

No 978, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines the effects of unemployment insurance on escape rates from unemployment using data from the 1998 Displaced Worker Survey. Transitions from unemployment to employment are modeled using a flexible representation of the baseline hazard function and allowing for discrete changes through time in the effects of unemployment insurance benefits, as well as those of the other covariates. The impact of unemployment insurance is also modeled using a time-varying benefits measure, namely, time to exhaustion of benefits. Potential biases stemming from reverse causation and unobserved individual heterogeneity are accommodated. Both approaches render transparent the major disincentive effects of access to benefits on re-employment rates while also providing evidence of time-varying effects of other regressors.

Keywords: unemployment duration; time-varying coefficients/regressors; unemployment benefits (search for similar items in EconPapers)
JEL-codes: J64 J65 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2004-01
New Economics Papers: this item is included in nep-ias, nep-lab and nep-ltv
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Citations: View citations in EconPapers (27)

Published - published in: Economics Letters, 2004, 85 (2), 229-234

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Journal Article: How does the unemployment insurance system shape the time profile of jobless duration? (2004)
Working Paper: How Does the Unemployment Insurance System Shape the Time Profile of Jobless Duration? (2004)
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