UNEMPLOYMENT BENEFITS IN A PERIOD OF CRISIS: THE EFFECT ON UNEMPLOYMENT DURATION

Anne Lauringson

No 82, University of Tartu - Faculty of Economics and Business Administration Working Paper Series from Faculty of Economics and Business Administration, University of Tartu (Estonia)

Abstract: The current study shows that the disincentive effects of unemployment benefits exist even during a period of deep recession. The study uses recent data for unemployment benefit recipients in Estonia – a country where the rise in unemployment during the global financial crisis was the highest in the entire European Union. Both a higher benefit level and a longer maximum duration of benefits decrease exits from unemployment to employment. Yet, compared to the pre-crisis period, the effects of unemployment benefits are slightly milder and more homogenous. In addition, unemployed people directed to active measures tend to exhibit a lower hazard of leaving unemployment just before the period of an active measure and during the period of receiving an active measure.

Keywords: unemployment benefits; disincentive effects; economic crisis; Estonia (search for similar items in EconPapers)
JEL-codes: C41 J64 J65 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2011
New Economics Papers: this item is included in nep-cis and nep-lab
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:mtk:febawb:82

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