Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/161107 
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers No. 10484
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper analyzes the effects of unemployment insurance (UI) benefits on unemployment exits and subsequent labor market outcomes. We exploit a piecewise linear relationship between the previous wage and UI benefits in Finland to identify the causal effects of the benefit level by using a regression kink design. According to our findings, higher benefits lengthen nonemployment spells and decrease time spent in part-time unemployment, and thus result in more full-time unemployment. Also the re-employment probability and post-unemployment wage are negatively affected. The results for the duration of the first post-unemployment job are not conclusive, but in total both employment and earnings in the two years following the beginning of the unemployment spell decrease with higher benefits.
Subjects: 
unemployment duration
job match quality
regression kink design
unemployment insurance
JEL: 
J64
J65
Document Type: 
Working Paper

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