DMCA
How Do Reductions in Potential Benefit Duration Affect Medium-Run Earnings and Employment for Older Workers? (2013)
BibTeX
@MISC{Degen13howdo,
author = {Kathrin Degen and Rafael Lalive},
title = {How Do Reductions in Potential Benefit Duration Affect Medium-Run Earnings and Employment for Older Workers?},
year = {2013}
}
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Abstract
We study how a reduction of the potential duration of unemployment benefit receipt (PBD) affects medium-run earnings and employment of job seekers. The analysis is based on a Swiss reform that reduced PBD from 24 months to 18 months for job seekers younger than 55 years in 2003. Adopting a difference-in-difference framework, we find that this reduction in PBD increases employment and earnings of job seekers aged 50 to 54 years not only in the first 24 months after entering unemployment but also up to 50 months after entering. The positive medium-run effects are concentrated among job seekers who were previously em-ployed in R&D intense industries and whose previous occupation consisted mainly of cognitive tasks. These findings suggest that unemployment insurance has an important role in containing depreciation of human capital or long-term unem-ployment stigma among older job seekers. JEL Classification: C41, J64, J65
Keyphrases
job seeker important role unemployment insurance positive medium-run effect jel classification intense industry previous occupation swiss reform difference-in-difference framework potential duration long-term unem-ployment stigma unemployment benefit receipt medium-run earnings pbd increase employment cognitive task human capital
