How effective are unemployment benefit sanctions? Looking beyond unemployment exit
Title | How effective are unemployment benefit sanctions? Looking beyond unemployment exit |
Publication Type | Journal Article |
Year of Publication | 2013 |
Authors | Arni, P, Lalive, R, van Ours, JC |
Journal | Journal of Applied Econometrics |
Volume | 28 |
Pagination | 1153-1178 |
ISSN | 1099-1255 |
Keywords | benefit sanctions, competing-risk duration models, earnings effects, unemployment duration |
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. |
URL | http://onlinelibrary.wiley.com/doi/10.1002/jae.2289/abstract |
DOI | 10.1002/jae.2289 |
Refereed Designation | Refereed |