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Work Incentives and the Probability of Leaving Unemployment in the Slovak Republic

Martina Lubyova and Jan van Ours

No 82, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: The system of unemployment benefits and subsistence benefits in Slovakia has potentially large disincentive effects with respect to the outflow from unemployment to a job. Especially low educated unemployed and unemployed with young children are often faced with replacement ratios which are close to 100%. We investigate whether the potential effects have an actual meaning. Using data from subsequent labour force surveys we analyze the (hazard) rates at which unemployed workers find jobs. We find no evidence of disincentive effects of the Slovak unemployment system.

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Date: 1997-07-01
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