Unemployment Duration, Incentives and Institutions
Link to article:
Authors:
Røed, Knut, Jensen, Peter, Thoursie, Anna
Year:
2002
Reference:
Memorandum
Number in series: 9
Summary
Based on a combined register database for Norwegian and Swedish unemployment spells, we use the ‘between-countries-variation’ in the unemployment insurance systems to identify causal effects. The elasticity of the job hazard rate with respect to the benefit re-placement ratio is around -1.0 in Norway and -0.5 in Sweden. The limited benefit dura-tion period in Sweden has a large positive impact on the hazard rate, despite generous renewal options through participation in labour market programs. Compulsory program participation seems to operate as a ‘stick’, rather than a ‘carrot’, and is therefore an effi-cient tool for counteracting moral hazard problems in the benefit system.
JEL:
C41, J64
Keywords:
Unemployment spells, unemployment compensation, non-parametric duration analysis
Project:
Oppdragsgiver: NOS-S og Nordisk ministerrådOppdragsgivers prosjektnr.:
Frisch prosjekt: 1212 - Unemployment insurance in the Nordic contries
Contact:
knut.roed@frisch.uio.no
Financing:
Nordisk Ministerråd og NOS-S
