The Non Take-up of an Unemployment Insurance Reform in France

Sylvie Blasco

No 2008-14, Working Papers from Center for Research in Economics and Statistics

Abstract: On July 2001 a more generous unemployment insurance system was introduced in France.Those who were registered at the national unemployment agency at the moment of thereform could choose between staying in the former system and switching to the new one.This paper deals with the selection problem. To explain non participation, we propose atheoretical stationary job search model with several search channels, endogenous searche ort and psychological and time costs associated with the use of the public channel.Because of data availability, we estimate the non take-up rate and identify the stayingpopulation using defective duration methods.We nd a signi cant non take-up rate smallerthan 10% and evidence of self-selection. Stigma, informational issues and expectation of ashort unemployment spell are found to explain non participation.

Pages: 40
Date: 2008
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