Can unemployment benefit cuts improve employment and earnings?

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State: Public
Version: author
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Serval ID
serval:BIB_3419181A042A
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
Can unemployment benefit cuts improve employment and earnings?
Journal
Empirical Economics
Author(s)
Cottier Lionel, Degen Kathrin, Lalive Rafael
ISSN
0377-7332
1435-8921
Publication state
Published
Issued date
29/03/2019
Language
english
Abstract
We study how a reduction in potential benefit duration (PBD) affects employment and earnings of job seekers before and after unemployment benefits exhaust. Reducing PBD induces job seekers to become less selective and accept jobs earlier, which can worsen or improve labor market outcomes. We study a 2003 reform that reduces PBD from 24 to 18 months for job seekers younger than 55 years in Switzerland. Using older job seekers as a control group, we find that reducing PBD increases employment and earnings even after unemployment benefits have run out. Employment and earnings increase particularly strongly for job seekers who previously worked in industries with high R&D expenditures, industries where job seekers’ skills can depreciate rapidly.
Keywords
Economics and Econometrics, Statistics and Probability, Social Sciences (miscellaneous), Mathematics (miscellaneous)
Create date
26/11/2019 9:38
Last modification date
27/11/2019 8:08
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