JEL classification: J63 J64 J65 Keywords: Unemployment insurance Job turnover Multivariate mix proportional hazard models Recall and layoffs Temporary dismissalsThe aim of this paper is to shed some light on the potential relationships between the unemployment insurance system and labour market turnover. This study assumes the incentives embedded in the unemployment insurance system have a heterogeneous impact, depending on the type of labour market transition (quits versus layoffs and recalls versus new job entrances) and on a worker's attachment to the labour market (gender and type of contract). The layoff hazard rate increases as workers qualify for unemployment benefits, whilst the quit hazard rate remains stable. Similarly, employment inflow increases sharply after the exhaustion of unemployment benefits. The timing and importance of the exit differ between recalls and new job entry and depend on a worker's attachment to the labour market. The results show that unemployment benefits appear to favour job turnover and both firms' and workers' decisions seem to matter.
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 dynamicsAn earlier version of this paper circulated under the title "Are there gains in employment stability by reducing unemployment benefit entitlement length? The case of Spain".
Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 9142 June 2015 ABSTRACT Gender Differentials in Unemployment Ins and Outs during the Great Recession in Spain *The Great Recession has had a disproportionately negative effect on working men compared to working women in many OECD countries and led to gender convergence in aggregate unemployment rates. In this paper we seek the sources of this recent convergence by using Social Security records on individuals to study the determinants of unemployment ins and outs over the course of a whole business cycle, i.e. 2000-2013. We focus on Spain -a country hit hard by unemployment increases in downturns. Our results indicate that unemployment outs are crucial in understanding changes in unemployment rates in Spain. Furthermore, the huge drop in unemployment outs in the recession, particularly for men, has led to unprecedented levels of long-term unemployment, which has come to account for 64% of total unemployment. Negative state dependence emerges as a key barrier to job access for the long-term unemployed and hence the rate of unemployment is expected to remain high for many years, even if there is a strong recovery.JEL Classification: J63, J64, J16
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