Does an increase in unemployment income lead to longer unemployment spells? Evidence using Danish unemployment assistance data

Ott Toomet ()
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Ott Toomet: Department of Economics, University of Aarhus, Denmark, Postal: 8000 Aarhus C, Denmark

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: Danish unemployment assistance depends on age; it increases by 70% when unemployed individuals turn 25. This feature is used to identify the impact of income on the unemployment-to-employment hazard rate. A mixed proportional hazard framework based on a 10% representative Danish registry data set is used. The results indicate that the income effect for females is negative and significant, corresponding to an income elasticity of -0.4. The effect for males is positive but insignifcant.

Keywords: welfare benefts; incentive effect; unemployment duration (search for similar items in EconPapers)
JEL-codes: J64 J65 (search for similar items in EconPapers)
Pages: 40
Date: 2005-05-23
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Citations: View citations in EconPapers (1)

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