Modelling the Time on Unemployment Insurance Benefits

Govert Bijwaard

No 2936, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: A duration model based on the time on Unemployment Insurance (UI) benefits instead of a model based on the time till re-employment is more relevant from a cost-benefit perspective. The contribution of this paper is to extend the standard (mixed) Proportional Hazard model to account for an upper bound on the duration. We use a modified mover-stayer model to this end and discuss the interpretation of the parameters. In an empirical application we compare the method with the standard analysis of unemployment duration. We also derive the expected UI-benefit costs implied by the model for some typical unemployed individuals.

Keywords: UI-benefits; maximum duration; mixed proportional hazard; mover-stayer model (search for similar items in EconPapers)
JEL-codes: C41 J64 J65 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2007-07
New Economics Papers: this item is included in nep-ias
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Working Paper: Modelling the time on unemployment insurance benefits (2007)
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