The effect of unemployment benefits on re-employment rates: Evidence from the Finnish UI-benefit reform

Roope Uusitalo and Jouko Verho

No 229, Working Papers from Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE

Abstract: In January 2003, the unemployment benefits increased in Finland for workers with longemployment histories. The average benefit increase was 15% for the first 150 days of unemployment spell. In this paper we evaluate the effect of benefit increase on the duration of unemployment by comparing the changes in the re-employment hazard profiles between the unemployed who became eligible to the increased benefits to a control group whose benefit structure remained unchanged. We find that benefit increase reduced re-employment hazardsin the beginning of the unemployment spell but that the effect disappears after the period withincreased benefits expires.

Pages: 35 pages
Date: 2007-03-15
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Citations: View citations in EconPapers (3)

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Working Paper: The effect of unemployment benefits on re-employment rates: evidence from the Finnish UI-benefit reform (2007)
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