For helpful comments on earlier drafts, we thank, without implicating, Moses Abramovitz, Yves Balcer, John Bishop, Alan Blinder, Richard Burkhauser, Michael Darby, Irwin Garfinkel, Alan Gustman, Daniel Hamermesh, Martin Holmer, George Jakubson, Robert Lampman, Paul Menchik, Robert Moffitt, Michael Murray, Joseph Quinn, Timothy Smeeding, Eugene Smolensky, Barbara Wolfe and two anonymous referees.

How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review

http://directory.umm.ac.id/Data%20Elmu/jurnal/J-a/Journal%20of%20Econometrics/Vol96.Issue2.June2000/2105.pdf

Duration dependence and nonparametric heterogeneity: A Monte Carlo study

The empirical literature on unemployment insurance has focused on its direct effect on unemployment duration, while the potential indirect effect on employment stability through a more efficient matching process, as the unemployed can search for a longer period, has attracted much less attention. In the European context this is surprising as reform proposals of the unemployment insurance system aiming at reducing high European unemployment rates should consider both effects. This paper provides evidence on the effect of unemployment benefits on unemployment and employment duration in Europe, using individual data from the European Community Household Panel for eight countries. Country specific estimates based on a multivariate discrete proportional hazard model, controlling for observed and unobserved individual heterogeneity, suggest that even if receiving benefits has a direct negative effect increasing the duration of unemployment spells, there is also a positive indirect effect of benefits on subsequent employment duration. This indirect effect is pronounced in countries with relatively generous benefit systems, and for recipients who have remained unemployed for at least six months. In terms of the magnitude of the effect, recipients remain employed on average two to four months longer than non-recipients. This represents a ten to twenty per cent increase relative to the average employment duration, compensating for the additional time spent in unemployment. These findings are in line with theories suggesting a matching effect of unemployment insurance.

Unemployment Insurance in Europe: Unemployment Duration and Subsequent Employment Stability

Using the native born as a benchmark we examine immigrants reliance on Canadas social safety net....We find that immigrants have lower participation rates in Unemployment Insurance and Social Assistance than natives. We also find that `assimilation leads to greater participation in both these programs....More recent immigrant cohorts have higher recipiency rates than their predecessors....The results for Social Assistance contrast with U.S. evidence that the raw entry participation rates of many immigrant cohorts exceed the native rates. Finally our analysis of rent subsidies...[shows that] immigrants initially have higher rates of participation which fall with assimilation. (EXCERPT)

https://www.jstor.org/stable/pdfplus/146226.pdf

The receipt of transfer payments by immigrants to Canada.

The disincentive effect of unemployment insurance on unemployment duration has been the focus of the empirical literature. The potential effect of unemployment insurance on post-unemployment outcomes, which may be regarded as beneficial by improving job matching, has attracted much less attention. This paper provides evidence on the effect of unemployment benefits on unemployment and employment duration in Europe, using individual data from the European Community Household Panel for eight countries. Country specific estimates based on multivariate discrete-time duration models, controlling for observed and unobserved individual heterogeneity, suggest that although receiving benefits has an adverse effect in the sense of increasing unemployment duration, there is also a positive effect by increasing subsequent employment duration. This beneficial effect of unemployment insurance on employment stability is pronounced in countries with relatively generous benefit systems, and for recipients who have remained unemployed for at least six months. These findings are in line with theories suggesting a matching effect of unemployment insurance.

/pdf/unemployment-insurance-in-europe-unemployment-duration-and-dkdbx8i7rm.pdf

Unemployment insurance in Europe: unemployment duration and subsequent employment stability

In this paper we examine whether the requirements which workers must satisfy to qualify for UI benefits in any succeeding period of joblessness affect the duration of employment spells. This behavioral consequence of a UI system has been neglected in empirical research, which has instead focused on the effects of UI parameters on the actions of the unemployed. The effect is identified by a unique change in the eligibility requirements of the Canadian UI system in 1990, which is orthogonal to changes in the economic environment. We find a significant increase in the employment hazard in the week that an individual satisfies the eligibility requirement in many regions of the country. In the spirit of Feldstein's (1976) study of temporary layoffs, the results provide new evidence of the impact of UI system parameters on the actions of employers and workers.

Employment Spells and Unemployment Insurance Eligibility Requirements

In this paper we examine whether the requirements that workers must satisfy to qualify for unemployment insurance (UI) benefits in any succeeding period of joblessness affect the duration of employment spells. This behavioral consequence of a UI system has been neglected in empirical research, which has instead focused on the effects of UI parameters on the actions of the unemployed. The effect is identified by a unique change in the eligibility requirements of the Canadian UI system in 1990, which increased the weeks of employment required to establish UI eligibility. We provide a variety of estimates of this behavioral effect. In our preferred set of results, we find a significant increase in the employment hazard in the week that an individual satisfies the eligibility requirement in many regions of the country. In the spirit of Feldstein's (1976) study of temporary layoffs, the results provide new evidence of the impact of UI system parameters on the actions of employers and workers.

Samuel A. Rea

Papers

Employment Spells and Unemployment Insurance Eligibility Requirements

Employment Spells and Unemployment Insurance Eligibility Requirements

The economics of comparative negligence

The economics of insurance law

Incentive effects of alternative negative income tax plans