How Do Extended Benefits Affect Unemployment Duration? A Regression Discontinuity Approach

36 Pages Posted: 31 Jul 2006

See all articles by Rafael Lalive

Rafael Lalive

University of Lausanne - Department of Economics; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: July 2006

Abstract

This paper studies a program that extends the maximum duration of unemployment benefits from 30 weeks to 209 weeks. Interestingly, this program is targeted to individuals aged 50 years or older, living in certain eligible regions in Austria. In the evaluation, I use sharp discontinuities in treatment assignment at age 50 and at the border between eligible regions and control regions to identify the effect of extended benefits on unemployment duration. Results indicate that the duration of job search is prolonged by at least .09 weeks per additional week of benefits among men, whereas unemployment duration increases by at least .32 weeks per additional week of benefits among women. The salient differences between men and women are consistent with the lower minimum age for early retirement applying to women.

Keywords: benefit duration, unemployment duration, early retirement, regression

JEL Classification: C41, J64, J65

Suggested Citation

Lalive, Rafael, How Do Extended Benefits Affect Unemployment Duration? A Regression Discontinuity Approach (July 2006). CESifo Working Paper Series No. 1765, IZA Discussion Paper No. 2200, Available at SSRN: https://ssrn.com/abstract=920628 or http://dx.doi.org/10.2139/ssrn.920628

Rafael Lalive (Contact Author)

University of Lausanne - Department of Economics ( email )

Batiment Internef
Lausanne, 1015
Switzerland

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

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