The effect of receiving supplementary UI benefits on unemployment duration

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

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

“…To do so we follow the approach developed by Kyyrä et al (2009) and calculate the expected remaining unemployment duration of entering a temp job at a given unemployment duration and at a given treatment duration, compared to the counterfactual of no treatment, i.e the average treatment effect on the treated. The median time until entry into the first temp job is about 11 weeks in our sample, and the median duration of a temp spell during an unemployment spell approximately 6 weeks.…”

“…Despite these tremendous expenses, studies 27 have generally shown that the effects of most activation programs are modest and sometimes even negative (e.g., Card et al 2009). In Denmark, activation policies that involve some real working experience for unemployed workers, in particular employment subsidies in private firms, seem to be most effective (see, e.g., Kyyrä et al 2009, Rosholm & Svarer 2008, Jespersen et al 2008. Almost all other program types show remarkably large lock-in effects.…”

“…Results for further controls are available upon request. measures the effect on the remaining unemployment duration of entering temp employment at unemployment duration and staying there for (at most)  weeks, compared to the counterfactual of no treatment, see Kyyrä et al (2009). Notes: Bold coefficients are statistically significant at least at the 5 percent level.…”

Should unemployment insurance cover partial unemployment?

“…In contrast, a Danish study finds significant lock-in effects in part-time unemployment [11]. The Danish system of unemployment benefits is more generous than the other systems studied.…”

“…Thus, it might be advisable to direct these benefits to workers with weaker connections to the labor market. The results of the Danish study suggest that youth and immigrant workers reap the largest gains from part-time unemployment insurance [11].…”