Benefit Duration, Job Search Behavior and Re-Employment

Andreas Lichter () and Amelie Schiprowski
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Andreas Lichter: DICE, Heinrich-Heine University Düsseldorf, IZA and CReAM

No 37, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

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 funding 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)
Pages: 40 pages
Date: 2020-11
New Economics Papers: this item is included in nep-eur, nep-ias and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_037_2020.pdf First version, 2020 (application/pdf)

Related works:
Journal Article: Benefit duration, job search behavior and re-employment (2021)
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:ajk:ajkdps:037

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