Benefit duration, job search behavior and re-employment

Andreas Lichter and Amelie Schiprowski

Journal of Public Economics, 2021, vol. 193, issue C

Abstract: This paper studies how the potential duration of unemployment benefits affects early job search behavior and re-employment outcomes. We exploit an unexpected reform of the German unemployment insurance (UI) scheme in 2008, which increased the potential benefit duration from 12 to 15 months for benefit recipients of age 50 to 54. Based on detailed survey data and a difference-in-differences design, we estimate that one additional month of potential benefits reduces early job applications by around 10%. Using social security data, we further find that the extension of benefits increases the average nonemployment duration of individuals entering UI after the reform. Among individuals who got treated at later stages of their unemployment spell, the increased UI coverage does not appear to come at the cost of longer nonemployment. A cautious back-of-the-envelope calculation reveals substantial job finding returns to early search effort.

Keywords: Unemployment insurance; Job search; Re-employment outcomes; Natural experiment (search for similar items in EconPapers)
JEL-codes: D83 I38 J64 J68 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Related works:
Working Paper: Benefit Duration, Job Search Behavior and Re-Employment (2020)
Working Paper: Benefit Duration, Job Search Behavior and Re-Employment (2020)
Working Paper: Benefit Duration, Job Search Behavior and Re-Employment (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:193:y:2021:i:c:s0047272720301900

DOI: 10.1016/j.jpubeco.2020.104326

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