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How do Changes in Potential Benefit Duration Affect Employment and Earnings?

English title How do Changes in Potential Benefit Duration Affect Employment and Earnings?
Applicant Lalive d'Epinay-Gisin Rafael
Number 146090
Funding scheme Project funding (Div. I-III)
Research institution Département d'économie (DE) Faculté des Hautes Etudes Commerciales (HEC) Université de Lausanne
Institution of higher education University of Lausanne - LA
Main discipline Economics
Start/End 01.05.2013 - 30.04.2014
Approved amount 58'718.00
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All Disciplines (2)

Discipline
Economics
Political science

Keywords (4)

unemployment insurance; earnings ; employment; potential benefit duration

Lay Summary (German)

Lead
Wie beeinflusst die Arbeitslosenversicherung Erwerbstätigkeit und Einkommen von stellensuchenden Personen?
Lay summary

Alle OECD Länder versichern ihre Arbeitskräfte gegen Verlust des Arbeitsplatzes. Die Arbeitslosenversicherung ist das Hauptinstrument, um den Arbeitssuchenden Schutz in Form von Erwerbsersatz zu bieten. Die bestehende Literatur hat vorrangig die Anreizeffekte der Arbeitslosenversicherung auf die Arbeitslosigkeitsdauer untersucht. Allerdings ist bisher wenig bekannt über das Schicksal der Arbeitssuchenden nach dem Verlassen der Arbeitslosenversicherung. Nicht alle Arbeitssuchenden kehren in den Arbeitsmarkt zurück, und diejenigen, welche zurückkehren akzeptieren möglicherweise weniger gut bezahlte und weniger stabile Arbeitsstellen.

Dieses Projekt untersucht die mittelfristigen Auswirkungen einer Reduktion der maximalen Bezugsfristen für ältere Arbeitssuchende (50 bis 54 Jahre alt) auf Erwerbstätigkeit und Erwerbseinkommen. Die Streichung von Arbeitslosenentschädigungen hat eindeutig positive Effekte auf die Erwerbstätigkeit in der Zeitperiode, welche nicht mehr versichert ist. Ist jedoch diese zusätzliche Arbeit von schlechterer Qualität, würde man erwarten, dass sich die kurzfristig positiven Effekte mittelfristig ins Negative wenden.

Die hauptsächliche Innovation dieses Projekts liegt in der umfassenden Perspektive des Analyserahmens. Bestehende Studien fokussieren typischerweise auf einzelne Aspekte, wie beispielsweise Löhne oder Stabilität der zukünftigen Arbeitsstelle. Im Gegensatz dazu untersucht diese Studie globale Masse für Erwerbseinkommen und Erwerbstätigkeit der Arbeitssuchenden. Der Hauptvorteil dieses Ansatzes liegt darin, dass Erwerbseinkommen für alle Arbeitssuchenden beobachtet werden können, während Löhne und Jobstabilität nur für Arbeitslose beobachtet werden, welche in den Arbeitsmarkt zurückkehren. Dies erweist sich als wichtig.

Direct link to Lay Summary Last update: 18.04.2013

Responsible applicant and co-applicants

Employees

Scientific events

Active participation

Title Type of contribution Title of article or contribution Date Place Persons involved
Labor Lunch Seminar Individual talk Winning versus Losing: How Important are Reservation Wages for Unemployment Duration? 07.03.2014 Berkeley, United States of America Degen Kathrin;
Seminar at LMU Individual talk Winning versus Losing: How Important are Reservation Wages for Unemployment Duration? 13.02.2014 München, Germany Degen Kathrin;
Seminar at CBS Individual talk Winning versus Losing: How Important are Reservation Wages for Unemployment Duration? 11.02.2014 Kopenhagen, Denmark Degen Kathrin;
CAFE Workshop Talk given at a conference Winning versus Losing: How Important are Reservation Wages for Unemployment Duration? 11.12.2013 Borkop, Denmark Degen Kathrin;
Health and Labor seminar Individual talk Winning versus Losing: How Important are Reservation Wages for Unemployment Duration? 03.12.2013 Lausanne, Switzerland Degen Kathrin;
PhD Seminar in Macroeconomics and Labour Markets Individual talk Winners versus Losers: How Important are Reservation Wages for Unemployment Duration? 07.11.2013 Zürich, Switzerland Degen Kathrin;
Literature and Research Seminar Empirical Economics Talk given at a conference “Winning versus Losing: How Important are Reservation Wages for Unemployment Duration? 01.11.2013 Freiburg i. Breisgau, Germany Degen Kathrin;
SSES Annual Congress Talk given at a conference How Does a Reduction in Potential Benefit Duration Affect Medium-Run Earnings and Employment? 20.06.2013 Neuenburg, Switzerland Degen Kathrin;
16th IZA Summer School in Labor Economics Talk given at a conference How Does a Reduction in Potential Benefit Duration Affect Medium-Run Earnings and Employment? 13.05.2013 Buch am Ammersee, Germany Degen Kathrin;
Faculty Seminar Individual talk How Does a Reduction in Potential Benefit Duration Affect Medium-Run Earnings and Employment? 01.05.2013 Mannheim, Germany Lalive d'Epinay-Gisin Rafael;


Knowledge transfer events

Active participation

Title Type of contribution Date Place Persons involved
Presentation of main findings State Secretariat for Economic Affairs SECO Talk 17.10.2013 Bern, Switzerland Degen Kathrin; Lalive d'Epinay-Gisin Rafael;


Abstract

All OECD countries insure their workforce against job loss. The main income replacement program offering protection is unemployment insurance. Existing literature has investigated the incentive effects of the design of unemployment insurance for the duration of unemployment, but little is known about the fate of job losers who have left unemployment insurance. Clearly not all job seekers re-enter the labor market and those who re-enter may accept jobs that are less stable or less well-paid.Understanding these post-unemployment effects of unemployment insurance is a crucial ingredient into a comprehensive welfare assessment of labor market policies. The unemployment insurance effects on employment and earnings highlight the medium-run consequences of better (or worse) protection. Such information needs to be considered in any policy discussion that aims improving welfare.This project provides key evidence on how shortening the potential duration of unemployment benefits for older workers (50 to 54 years old) affects medium-run employment and earnings. Clearly, withdrawing benefits to job seekers immediately generates more employment in the period that is no longer protected. However, if the additional employment is of worse quality, one might expect this positive short-run effect to turn negative. The key innovation of this project is the comprehensive evaluation approach that we adopt. Whereas existing studies typically focus on one or two post-unemployment outcomes (such as wage or stability of future employment), we provide overall estimates on job seekers’ earnings. The key advantage from the identification point of view is that earnings can be observed for all job seekers whereas wages and job stability can only be observed for job seekers who leave unemployment to jobs. This turns out to be important.
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