How Effective Are Unemployment Benefit Sanctions? Looking Beyond Unemployment Exit

Abstract

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Looking beyond the bridge: The effect of temporary agency employment on labor market outcomes

“…First, we follow Arni et al (2009) by modeling the post-treatment wage explicitly. However, contrary to them, we specify a log-normal distribution for the post-unemployment wage, that is,…”

Demanding Activation

“…The study concludes that the net effect of benefit sanctions is negative in macroeconomic terms -because equilibrium unemployment is not affected (i.e. reduced unemployment duration and reduced employment duration cancel each other out) and in microeconomic termsbecause individuals are forced into unstable jobs and face a reduction in their life-time income (Arni et al, 2013). Another study yields similar findings about persistent sanction effects on subsequent job quality (Van den Berg and Vikström, 2009: 45).…”

“…Arni et al found that 12.5 per cent of the sample exited to non-employment, with 'a remarkable rise' in the rate of exit to non-employment -99 per cent in response to a sanction announcement. They also found that an enforced sanction 'results in an additional increment' of 67 per cent to the exit to non-employment rate (Arni et al, 2013(Arni et al, : 1165. In some cases, people become unregistered as unemployed while continuing to look for work (Arni et al, 2013(Arni et al, : 1166.…”

“…They also found that an enforced sanction 'results in an additional increment' of 67 per cent to the exit to non-employment rate (Arni et al, 2013(Arni et al, : 1165. In some cases, people become unregistered as unemployed while continuing to look for work (Arni et al, 2013(Arni et al, : 1166. This should be mostly a welcome situation from the current official point of view: even though such unemployed people make themselves unavailable for inferior jobs, they are still participating in job search and at no cost to the 'taxpayer'.…”

“…This should be mostly a welcome situation from the current official point of view: even though such unemployed people make themselves unavailable for inferior jobs, they are still participating in job search and at no cost to the 'taxpayer'. This option however is 'truly costly' to the individual in monetary terms (Arni et al, 2013(Arni et al, : 1169.…”