Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0463.pdf Non-technical SummaryIn European countries unemployment levels are typically higher and unemployment durations are often longer than in the United States. These unemployment differences have been the focus of much political and academic debate in recent years.The unemployment compensation system, with more generous benefit levels and longer entitlement periods, is often blamed to be responsible for much of the European unemployment problem. In this paper we show that this is indeed true for a large share of the long-term unemployment of the elderly in Finland.Among the European countries Finland has performed relatively poorly in terms of unemployment. As a consequence of the deep depression in the early 1990s, the Finnish unemployment rate peaked to almost 20 percent in 1994. Despite rapid economic growth over the latter part of the 1990s, unemployment has stuck at a high level and the fraction of the long-term unemployed has increased alarmingly. As in other European countries, such as Germany and France, the share of elderly long-term unemployed is large. The Finish unemployment tunnel scheme is often blamed to be responsible for that. This scheme allows the elderly unemployed to collect unemployment benefits up to the age of 60, when they can retire via a particular unemployment pension. In 1997 the eligibility age of this scheme was raised from 53 to 55. We consider changes in the risk of unemployment, unemployment durations, and the exit states before and after the reform. In the duration analysis a flexible treatment design is adopted by allowing for quantile treatment effects. We apply three different non-and semiparametric methods, which all produce robust and coherent results. After the reform the group aged 53-54 has a lower risk of unemployment, shorter unemployment durations, higher exit rates to employment and it is not anymore distinguishable from the group aged 50-52. We provide calculations of the expected save in unemployment benefit transfers due to the reform and found that it is in the range of 100 million euros per age cohort. Reduction in the Long AbstractIn Finland the elderly unemployed are allowed to collect unemployment benefits up to the age of 60, when they can retire via a particular unemployment pension. In 1997 the eligibility age of persons benefiting from this scheme was raised from 53 to 55. We consider changes in the risk of unemployment, unemployment durations, and the exit states befo...

No abstract

We consider the consequences of working part-time on supplementary unemployment insurance benefits in the Danish labour market. Following the "timing-of-events" approach we estimate causal effects of subsidized part-time work on the hazard rate out of unemployment insurance benefit receipt. We find evidence of a negative lock-in effect and a positive post-treatment effect, both of which vary across individuals. The resulting net effect on the expected unemployment duration is positive for some groups (e.g. married women) and negative for others (e.g. young workers).JEL Classification: C41, J65

No abstract