Reduction in the Long-Term Unemployment of the Elderly: A Success Story from Finland

Tomi Kyyrä and Ralf Wilke

No 346, Discussion Papers from VATT Institute for Economic Research

Abstract: In Finland the elderly unemployed are allowed to collect unemployment benefits up to the age of 60, when they can retire via a particular unemployment pension. In 1997 the eligibility age of persons benefiting from this scheme was raised from 53 to 55. We consider layo􀀞 risks, unemployment durations, and the exit states before and after the reform. In the duration analysis a flexible treatment design is adopted by allowing for quantile treatment e􀀞ects. We apply three di􀀞erent non- and semiparametric methods, which all produce robust and coherent results. Since the reform the group aged 53-54 has had a lower risk of unemployment, shorter unemployment durations, and higher exit rates to employment, and it is no longer distinguishable from the group aged 50-52. We compute the expected saving in unemployment benefits in the private sector due to the reform and find that it is in the range of 100 million euros per age cohort.

Keywords: Unemployment insurance reform, quantile treatment effect, non- and semiparametric methods, Finnish register data., Labour market, Työmarkkinat, Social security, Sosiaaliturva, Labor market and policies promoting economic growth, Työmarkkinat ja kasvua tukeva politiikka, C140 - Semiparametric and Nonparametric Methods, J140 - Economics of the Elderly; Economics of the Handicapped, J600 - Mobility, Unemployment, and Vacancies: General, (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (7)

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Journal Article: Reduction in the Long-Term Unemployment of the Elderly: A Success Story from Finland (2007)
Working Paper: Reduction in the Long-Term Unemployment of the Elderly: A Success Story from Finland (2004)
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