Are Unemployment Benefits harmful to the stability of working careers? The case of Spain

Yolanda F. Rebollo-Sanz and J. Ignacio García Pérez ()

No 14.02, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: Unemployment insurance is usually found to show negative effects in the transition from unemployment to a new job. However, the extent to which workers’ careers might improve or deteriorate as a result of the unemployment insurance system is not immediately clear. This paper addresses the effects of certain aspects of this system on employment stability by jointly accounting for benefits endogeneity, dynamic selection issues and occurrence dependence. The analysis is undertaken for a dual labour market, such as the market in Spain, where temporary and permanent workers differ with respect to numerous individual and labour market characteristics. We find that non-insured unemployed workers experience a greater rate of transition to employment than insured workers. But we also find that benefits encourage job stability for temporary workers not only by increasing subsequent job tenure but also by increasing the probability of entering into a permanent contract. Finally, we get that shortening the duration of the benefit entitlement period does not seem to lead to significant gains in overall employment stability, which increases at most by 4.3%. .

Keywords: Unemployment insurance; Multivariate Mixed Proportional Hazard Model; Job Turnover; Employment Stability; Employment Dynamics (search for similar items in EconPapers)
JEL-codes: J63 J64 J65 J68 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2014-03
New Economics Papers: this item is included in nep-eur, nep-ger, nep-ias and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Are unemployment benefits harmful to the stability of working careers? The case of Spain (2015)
Working Paper: Are Unemployment Benefits harmful to the stability of working careers? The case of Spain (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pab:wpaper:14.02

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