The Relationship between Unemployment Benefits and Re‐employment Probabilities: Evidence from Spain

Stephen Jenkins and Carlos García‐Serrano
Authors registered in the RePEc Author Service: Carlos García-Serrano

Oxford Bulletin of Economics and Statistics, 2004, vol. 66, issue 2, 239-260

Abstract: We provide the first Spanish evidence about the effects on re‐employment probabilities of variations in benefit levels and time‐to‐exhaustion. Increases in unemployment insurance (UI) benefit levels had a small disincentive effect on the re‐employment hazard on average. Around this average, there were larger disincentive effects for men with elapsed durations between 4 and 18 months, whereas for men unemployed longer than 18 months, or for men resident in the south, the effect was negligible. Re‐employment hazards increased when UI exhaustion was imminent, but the change was small. Extensions to unemployment assistance eligibility in 1989 for men aged 45+ years lowered re‐employment probabilities.

Date: 2004
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