Benefit Duration, Job Search Behavior and Re-Employment

Andreas Lichter () and Amelie Schiprowski

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, 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 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)
Pages: 39
Date: 2020-11
New Economics Papers: this item is included in nep-ias and nep-lab
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Citations: View citations in EconPapers (4)

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https://www.crctr224.de/research/discussion-papers/archive/dp164

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:bon:boncrc:crctr224_2020_164v2

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