Shortening the potential duration of unemployment benefits and labor market outcomes: Evidence from a natural experiment in Germany

Publikation: Arbeits- oder Diskussionspapiere und BerichteArbeits- oder Diskussionspapiere

Authors

This paper explores the effects of a major reform of unemployment benefits in Germany on the labor market outcomes of individuals with some health impairment. The reform induced a substantial reduction in the potential duration of regular unemployment benefits for older workers. This work analyzes the reform in a wider framework of institutional interactions, which allows us to distinguish between its intended and unintended effects. Our results provide causal evidence for a significant decrease in the number of days in unemployment benefits and increase in the number of days in employment. However, they also suggest a significant increase in the number of days in unemployment assistance, granted upon exhaustion of unemployment benefits. Transitions to unemployment assistance represent an unintended effect, limiting the success of a policy change that aims to increase labor supply via reductions in the generosity of the unemployment insurance system.
OriginalspracheEnglisch
ErscheinungsortLüneburg
VerlagInstitut für Volkswirtschaftslehre der Universität Lüneburg
Anzahl der Seiten48
PublikationsstatusErschienen - 01.2018

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