How changes in benefits entitlement affect job-finding: Lessons from the Slovenian “Experiment (2006)
| Venue: | Journal of Labor Economics |
| Citations: | 11 - 0 self |
BibTeX
@ARTICLE{Vodopivec06howchanges,
author = {Milan Vodopivec and World Bank},
title = {How changes in benefits entitlement affect job-finding: Lessons from the Slovenian “Experiment},
journal = {Journal of Labor Economics},
year = {2006},
pages = {351--378}
}
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Abstract
In 1998 the Slovenian UI system was drastically reformed. The reform reduced the potential duration of unemployment benefits substantially and simultaneously improved employment services offered to, and monitoring of, the recipients. We find that the reduction in potential benefit duration had a positive effect on the exit rate out of unemployment – both to employment and to other destinations – at various durations of unemployment spells and for many categories of unemployed workers. We also identify a clear spike in the exit rate out of unemployment in the month unemployment benefits expire (and a smaller spike in the month thereafter), and for males an increase of job-finding rate in the third month of unemployment, a likely consequence of a reduction of the level of benefit that occurs at that point. Interestingly, post-unemployment wages of recipients were not affected after the change of the law, suggesting that higher job-finding rates following the reduction of benefits were not produced by reduced reservation wages (higher acceptance probability) but rather more effective job-search activity.
Keyphrases
slovenian experiment benefit entitlement affect job-finding exit rate job-finding rate month unemployment benefit slovenian ui system reduced reservation wage post-unemployment wage positive effect unemployment benefit many category effective job-search activity third month potential benefit duration potential duration unemployed worker employment service likely consequence acceptance probability unemployment spell various duration clear spike
