The net effect of unemployment benefits, sanctions and training on regular employment
Bruno Van der Linden () and
Eric Dor ()
No 2003-ECO-01, Working Papers from IESEG School of Management
This paper measures the impact of labor market policies (LMPs) on regular employment. Contrary to previous empirical studies, we conduct an econometric analysis based on sound theoretical foundations. The specification is based on an equilibrium job search model where LMPs affect tightness on the labor market. The impacts of a comprehensive set of LMPs on the regular employment rate and on wages are jointly estimated. Taking care of the endogeneity of LMPs, our results for Belgium indicate that unemployment benefits have a positively and small impact on wages and a negative one on the employment rate. The rate of sanctions has a small negative effect on wages. Their impact on the employment rate is however negative. This can be understood if the efficiency of the sanctioned in the matching process is sufficiently lower than the one of the insured unemployed. Training programmes have a small negative effect on wages and a small positive one on employment. Our analysis also shows that the results can be sensitive to the choice made about the exogeneity of LMPs.
Keywords: evaluation; labor market policies; wage bargaining; equilibrium unemployment; equilibrium search (search for similar items in EconPapers)
JEL-codes: J63 J64 J65 J68 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://my.ieseg.fr/bienvenue/DownloadDoc.asp?Fich= ... VanderLinden_Dor.pdf First version, 2003 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ies:wpaper:e200301
Access Statistics for this paper
More papers in Working Papers from IESEG School of Management Contact information at EDIRC.
Bibliographic data for series maintained by Joao DA CUNHA ().