Modeling Financial Incentives to Get Unemployed Back to Work

Jan Boone and Jan van Ours

No 108, IZA Discussion Papers from IZA Network @ LISER

Abstract: We model how unemployment benefit sanctions - benefit reductions that are imposed if unemployed do not comply with job search guidelines - affect unemployment. In our analysis we find that not only micro effects concerning the behavior of individual unemployed workers are relevant, but also macro-spillover effects from the additional creation of vacancies, which originates from the increased effectiveness of labor supply. We advocate that for a given loss in welfare for the unemployed benefit sanctions are more effective in reducing unemployment than an across the board reduction in the replacement rate.

Keywords: financial incentives; Unemployment benefits; sanctions (search for similar items in EconPapers)
JEL-codes: H55 J65 J68 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2000-01
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (38)

Published - published in: Journal of Institutional and Theoretical Economics, 2006, 162 (2), 227-252

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Related works:
Journal Article: Modeling Financial Incentives to Get the Unemployed Back to Work (2006)
Working Paper: Modelling Financial Incentives To Get Unemployed Back To Work (2000)
Working Paper: Modeling Financial Incentives to Get Unemployed Back to Work (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp108

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