How effective are unemployment benefit sanctions? Looking beyond unemployment exit

P. Arni, R. Lalive, J.C. van Ours

Research output: Contribution to journalArticleScientificpeer-review

53 Citations (Scopus)

Abstract

This paper provides a comprehensive evaluation of the effects of benefit sanctions on post-unemployment outcomes such as post-unemployment employment stability and earnings. We use rich register data which allow us to distinguish between a warning that a benefit reduction may take place in the near future and the actual withdrawal of unemployment benefits. Adopting a multivariate mixed proportional hazard approach to address selectivity, we find that warnings do not affect subsequent employment stability but do reduce post-unemployment earnings. Actual benefit reductions lower the quality of post-unemployment jobs both in terms of job duration as well as in terms of earnings. Copyright © 2012 John Wiley & Sons, Ltd.
Original languageEnglish
Pages (from-to)1153-1178
JournalJournal of Applied Econometrics
Volume28
Issue number7
Early online date19 Jun 2012
DOIs
Publication statusPublished - 2013

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