Equilibrium unemployment and the duration of unemployment benefits

R. Lalive, J.C. van Ours, J. Zweimüller

Research output: Contribution to journalArticleScientificpeer-review

Abstract

This paper uses microdata to evaluate the impact on the steady-state unemployment rate of an increase in maximum benefit duration. We evaluate a policy change in Austria that extended maximum benefit duration and use this policy change to estimate the causal impact of benefit duration on labor market flows. We find that the policy change leads to a significant increase in the steady-state unemployment rate and, surprisingly, most of this increase is due to an increase in the inflow into rather than the outflow from unemployment.
Original languageEnglish
Pages (from-to)1385-1409
JournalJournal of Population Economics
Volume24
Issue number4
DOIs
Publication statusPublished - 2011

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duration of unemployment
unemployment
unemployment rate
Austria
labor market
Policy change
Duration of unemployment
Equilibrium unemployment
Unemployment benefits
Unemployment rate

Cite this

Lalive, R. ; van Ours, J.C. ; Zweimüller, J. / Equilibrium unemployment and the duration of unemployment benefits. In: Journal of Population Economics. 2011 ; Vol. 24, No. 4. pp. 1385-1409.
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author = "R. Lalive and {van Ours}, J.C. and J. Zweim{\"u}ller",
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Equilibrium unemployment and the duration of unemployment benefits. / Lalive, R.; van Ours, J.C.; Zweimüller, J.

In: Journal of Population Economics, Vol. 24, No. 4, 2011, p. 1385-1409.

Research output: Contribution to journalArticleScientificpeer-review

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AB - This paper uses microdata to evaluate the impact on the steady-state unemployment rate of an increase in maximum benefit duration. We evaluate a policy change in Austria that extended maximum benefit duration and use this policy change to estimate the causal impact of benefit duration on labor market flows. We find that the policy change leads to a significant increase in the steady-state unemployment rate and, surprisingly, most of this increase is due to an increase in the inflow into rather than the outflow from unemployment.

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