Entitled to Leave: The impact of Unemployment Insurance Eligibility on Employment Duration and Job Quality

120 Pages Posted: 16 Jan 2020

See all articles by Laura Khoury

Laura Khoury

Norwegian School of Economics (NHH)

Clément Brébion

Paris School of Economics (PSE)

Simon Briole

Paris School of Economics (PSE)

Date Written: January 13, 2020

Abstract

Entitlement conditions are a little explored dimension of unemployment insurance (UI) schemes. In this paper, we provide a comprehensive evaluation of a reform that softened the minimum employment record condition to qualify for UI benefits in France after 2009. Using administrative panel data matching employment and unemployment spells, we first provide clear evidence that the reform induced a separation response at the eligibility threshold. It appears both at the micro level – through a jump in transitions from employment to unemployment – and at the macro level – through the scheduling of shorter contracts, in line with the new eligibility requirements. Exploiting the reform as well as relevant sample restrictions, we then estimate the effects of receiving UI benefits on subsequent labour market outcomes using a regression discontinuity design. Our findings point to a large negative impact of UI benefits receipt on employment probability up to 21 months after meeting the eligibility criterion, which is not counterbalanced by an increase in job quality.

Keywords: Unemployment, Employment duration, Behavioural response, Entitlement conditions, Job quality

JEL Classification: J08, J65, J68, H31

Suggested Citation

Khoury, Laura and Brébion, Clément and Briole, Simon, Entitled to Leave: The impact of Unemployment Insurance Eligibility on Employment Duration and Job Quality (January 13, 2020). NHH Dept. of Economics Discussion Paper No. 01/2020, Available at SSRN: https://ssrn.com/abstract=3519901 or http://dx.doi.org/10.2139/ssrn.3519901

Laura Khoury (Contact Author)

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway

Clément Brébion

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Simon Briole

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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