Unemployment Duration, Benefit Duration and the Business Cycle

Bover, Olympia; Arellano, Manuel; Bentolila, Samuel

doi:10.1111/1468-0297.00034

Cited by 169 publications

(181 citation statements)

References 29 publications

(38 reference statements)

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“…The variables in x(t) are the same as in the unemployment hazard. Following Bover et al (2002) and García-Perez and Muñoz-Bullón (2011), we use a logistic distribution to model all hazard rates. 11 Moreover, as we are considering competing risks models for both employment and unemployment, exit from a given state needs to be specified as a multinomial logit model with two alternative risks for each state:…”

Section: Empirical Approachmentioning

confidence: 99%

Are the Spanish long-term unemployed unemployable?

Bentolila

Pérez

Jansen

2017

SERIEs

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Long-term unemployment reached unprecedented levels in Spain in the wake of the Great Recession and it still affects around 57% of the unemployed. We document the sources that contributed to the rise in long-term unemployment and analyze its persistence using state-of-the-art duration models. We find pervasive evidence of negative duration dependence, while personal characteristics such as mature age, lack of experience, and entitlement to unemployment benefits are key to understand the cross-sectional differences in the incidence of long-term unemployment. The negative impact of low levels of skill and education is muted by the large share of temporary contracts, but once we restrict attention to employment spells lasting at least 1 month This is a revised version of the Presidential Address delivered by the first author at the 40th Simposio de la Asociación Española de Economía in Girona. We are grateful to two anonymous referees, Manuel Arellano, Rolf Campos, Mario Izquierdo, Ernesto Villanueva, and seminar participants at the Banco de España, the European Central Bank, the International Labor Office, and the University of Edinburgh for comments, to Yolanda Rebollo-Sanz for help with the data, and to Lucía Gorjón and Ingeborg Kukla for excellent research assistance. Bentolila thanks the Economics Department of Universidad Carlos III de Madrid for their hospitality. García-Pérez and Jansen gratefully acknowledge financial support from MINECO/FEDER (Grants ECO2015-65408-R and ECO2015-69631-P). these factors also contribute to a higher risk of long-term unemployment. Surprisingly, workers from the construction sector do not fare worse than similar workers from other sectors. Finally, self-reported reservation wages are found to respond strongly to the cycle, but much less to individual unemployment duration. In view of these findings, we argue that active labor market policies should play a more prominent role in the fight against long-term unemployment while early activation should be used to curb inflows.

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Section: Empirical Approachmentioning

confidence: 99%

Are the Spanish long-term unemployed unemployable?

Bentolila

Pérez

Jansen

2017

SERIEs

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“…Many empirical studies support this discouraging effect of unemployment insurance on job searches. The jump up in employment around the expiration of unemployment insurance and thus prolonged unemployment duration until the expiration date is reported by many researchers, for example, Moffitt (1985), Katz and Meyer (1990), Poterba and Summers (1995), Green and Riddell (1997), Card and Levine (2000) for the U.S. results, and Carling, Holmlund and Vejsiu (2001), Bover, Arellano and Bentolila (2002), Lalive and Zweimüller (2004), Lalive, Van Ours and Zweimüller (2006), Lalive (2007), and Card, Chetty and Weber (2007) for the European results.…”

Section: Introductionmentioning

confidence: 77%

Is longer unemployment rewarded with longer job tenure?

Kohara

Sasaki

Machikita

2013

Journal of the Japanese and International Economies

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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. This paper examines whether or not a prolonged unemployment period can raise the quality of job matching after unemployment. We focus on job tenure as an indicator of a good quality job match after unemployment. We match two sets of Japanese administrative data compiled by the public employment security offices: one includes information about the circumstances of job seekers receiving unemployment insurance, and the other includes information about job seekers applying for jobs. We first show a negative relationship between unemployment duration and the subsequent job duration. Restricting the sample to job seekers who changed search behaviors in the final 59 days before expiration of unemployment insurance, we secondly show an even greater negative effect of unemployment duration on the following job duration. The importance lies not only in the duration of unemployment. If job seekers keep a high reservation wage and a low search intensity because of the benefits of unemployment insurance, and change them in response to the expiration of insurance, prolonged unemployment will result in short job duration after unemployment.JEL Classification: J64, J65, J68

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“…Some authors found a positive correlation between the level of unemployment benefits and the length unemployment [Stetsenko 2003;Bover, Arellano, and Bentotila 2002, data: Labour Force Survey, 1987-1994Røed and Zhang 2003;Arulampalam and Stewart 1995;Belzil 2001;Carroll 2006;Lalive 2007;Røed, Jensen, and Thoursie 2008;Arntz and Wilke 2009;Bieszk-Stolorz and Markowicz 2015b] and in case of disabled people [Dànàcicà and Cîrnu 2014].…”

Section: Literature Reviewmentioning

confidence: 99%

Application of correspondence analysis to the identification of the influence of features of unemployed persons on the unemployment duration

Batóg

2016

EBR

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BOOK REVIEWSMariusz E. Sokołowicz, Rozwój terytorialny w świetle dorobku ekonomii instytucjonalnej. Przestrzeń -bliskość - ....................................................................................................................... 118 Application of correspondence analysis to the identification of the influence of features of unemployed persons on the unemployment duration 1 Jacek Batóg 2 , Barbara Batóg 2 Abstract : The paper presents the analysis of the influence of selected features of unemployed persons on unemployment duration. Theoretical considerations go along with an empirical study based on individual data from Local Labour Office in Szczecin. The research hypothesis states that features of unemployed persons such as the level of education, sex, work seniority or age have a meaningful influence on unemployment duration. Recent studies usually used event history analysis, inflow-outflow analysis of the labour market or logit models. This research is unique because of the application of one of the methods of multidimensional analysis -correspondence analysis. This method allows analysis of multidimensional relationships between categories of nominal variables. From the results obtained it could be stated that strong relationships between unemployment duration and features of unemployed persons exist (apart from sex).

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Unemployment Duration, Benefit Duration and the Business Cycle

Cited by 169 publications

References 29 publications

Are the Spanish long-term unemployed unemployable?

Are the Spanish long-term unemployed unemployable?

Is longer unemployment rewarded with longer job tenure?

Application of correspondence analysis to the identification of the influence of features of unemployed persons on the unemployment duration

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