Benefit reentitlement conditions in unemployment insurance schemes

Torben M. Andersen, Mark Strøm Kristoffersen and Michael Svarer

Labour Economics, 2018, vol. 52, issue C, 27-39

Abstract: The past employment history – employment requirements – is part of the eligibility conditions for unemployment insurance in most western countries. In a standard search-matching model, we show how employment requirements strengthen the reentitlement effect and thereby changes the trade-off between insurance and incentives in the design of the optimal insurance scheme. Deploying employment requirements for benefit eligibility may thus allow for both higher benefit levels and longer duration, and yet labor market performance is improved. When the need for insurance increases due to higher risk aversion, employment requirements becomes less lenient, and oppositely when the environment becomes more risky.

Keywords: Reentitlement effects; Incentives; Job-search; Unemployment insurance (search for similar items in EconPapers)
JEL-codes: E32 H3 J65 (search for similar items in EconPapers)
Date: 2018
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Related works:
Working Paper: Benefit reentitlement conditions in unemployment insurance schemes (2018)
Working Paper: Benefit Reentitlement Conditions in Unemployment Insurance Schemes (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:52:y:2018:i:c:p:27-39

DOI: 10.1016/j.labeco.2018.03.001

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