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How Changes in Unemployment Benefit Duration Affect the Inflow into Unemployment

Author

Listed:
  • van Ours, Jan C.

    (Erasmus School of Economics)

  • Tuit, Sander

    (Tilburg University)

Abstract
We study how changes in the maximum benefit duration affect the inflow into unemployment in the Netherlands. Until August 2003, workers who became unemployed after age 57.5 were entitled to unemployment benefits until the age of 65, after which they would receive old age pensions. This characteristic made it attractive for workers to enter unemployment shortly after age 57.5 rather than shortly before. Indeed, we find a peak in the inflow into unemployment for workers after age 57.5. From August 2003 onwards the maximum benefit durations were reduced. We find that shortly after 2003 the peak in the inflow disappeared.

Suggested Citation

  • van Ours, Jan C. & Tuit, Sander, 2010. "How Changes in Unemployment Benefit Duration Affect the Inflow into Unemployment," IZA Discussion Papers 4691, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4691
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    References listed on IDEAS

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    1. Green, David A & Riddell, W Craig, 1997. "Qualifying for Unemployment Insurance: An Empirical Analysis," Economic Journal, Royal Economic Society, vol. 107(440), pages 67-84, January.
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    Cited by:

    1. Hartung, Benjamin & Jung, Philip & Kuhn, Moritz, 2018. "What Hides behind the German Labor Market Miracle? Unemployment Insurance Reforms and Labor Market Dynamics," IZA Discussion Papers 12001, Institute of Labor Economics (IZA).
    2. Kyyrä, Tomi & Pesola, Hanna, 2020. "Long-term effects of extended unemployment benefits for older workers," Labour Economics, Elsevier, vol. 62(C).
    3. Kruse, Herman & Myhre, Andreas, 2021. "Early Retirement Provision for Elderly Displaced Workers," MPRA Paper 118689, University Library of Munich, Germany, revised 21 Sep 2023.
    4. Khoury, Laura, 2023. "Unemployment benefits and redundancies: Incidence and timing effects," Journal of Public Economics, Elsevier, vol. 226(C).
    5. Octave Brouwer & Ilan Tojerow, 2024. "Old-age unemployment and labour supply: an application to Belgium," Empirical Economics, Springer, vol. 67(1), pages 253-287, July.
    6. Laura Khoury, 2021. "Unemployment Benefits and the Timing of Redundancies," Working Papers halshs-02057145, HAL.
    7. Albanese, Andrea & Picchio, Matteo & Ghirelli, Corinna, 2020. "Timed to Say Goodbye: Does Unemployment Benefit Eligibility Affect Worker Layoffs?," Labour Economics, Elsevier, vol. 65(C).
    8. Thomas Le Barbanchon & Johannes F. Schmieder & Andrea Weber, 2024. "Job Search, Unemployment Insurance, and Active Labor Market Policies," NBER Working Papers 32720, National Bureau of Economic Research, Inc.
    9. Patrick Hullegie & Jan Ours, 2014. "Seek and Ye Shall Find: How Search Requirements Affect Job Finding Rates of Older Workers," De Economist, Springer, vol. 162(4), pages 377-395, December.
    10. Baguelin, Olivier & Remillon, Delphine, 2014. "Unemployment insurance and management of the older workforce in a dual labor market: Evidence from France," Labour Economics, Elsevier, vol. 30(C), pages 245-264.
    11. Laura Khoury, 2019. "Unemployment Benefits and the Timing of Redundancies: Evidence from Bunching," PSE Working Papers halshs-02057145, HAL.
    12. Yashiro, Naomitsu & Kyyrä, Tomi & Hwang, Hyunjeong & Tuomala, Juha, 2020. "Technology, Labour Market Institutions and Early Retirement: Evidence from Finland," IZA Discussion Papers 13990, Institute of Labor Economics (IZA).
    13. Lammers, Marloes & Bloemen, Hans & Hochguertel, Stefan, 2013. "Job search requirements for older unemployed: Transitions to employment, early retirement and disability benefits," European Economic Review, Elsevier, vol. 58(C), pages 31-57.
    14. Arranz, José M. & García-Serrano, Carlos, 2020. "Does unemployment benefit duration affect inflows into unemployment? The impact of a law change for older workers," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    15. Hans Bloemen, 2022. "Job search requirements for older unemployed workers," IZA World of Labor, Institute of Labor Economics (IZA), pages 235-235, November.
    16. Gałecka-Burdziak, Ewa & Jessen, Jonas & Jessen, Robin & Johnston, Andrew, 2024. "Moral Hazard among the Employed: Evidence from Regression Discontinuity," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302445, Verein für Socialpolitik / German Economic Association.
    17. Hullegie, P.G.J., 2012. "Essays on health and labor economics," Other publications TiSEM dcc68fc9-7af1-4ba9-8f90-6, Tilburg University, School of Economics and Management.
    18. Tuit, Sander & van Ours, Jan C., 2010. "How changes in unemployment benefit duration affect the inflow into unemployment," Economics Letters, Elsevier, vol. 109(2), pages 105-107, November.
    19. Jessen, Jonas & Jessen, Robin & Galecka-Burdziak, Ewa & Góra, Marek & Kluve, Jochen, 2023. "The Micro and Macro Effects of Changes in the Potential Benefit Duration," IZA Discussion Papers 15978, Institute of Labor Economics (IZA).
    20. Bengtsson, Mats & König, Stefanie & Schönbeck, Simon & Wadensjö, Eskil, 2022. "Leaving the Labor Market Early in Sweden – Learning from International Experience," IZA Discussion Papers 15327, Institute of Labor Economics (IZA).
    21. Гильтман М. А. & Антосик Л. В. & Токарева О. Е. & Обухович Н. В., 2021. "Повышение Пенсионного Возраста В России: Итоги 2019 Г. Пример Тюменской Области," Вопросы государственного и муниципального управления // Public administration issues, НИУ ВШЭ, issue 2, pages 154-182.
    22. Kruse, Herman & Myhre, Andreas, 2021. "Early Retirement Provision for Elderly Displaced Workers," MPRA Paper 109431, University Library of Munich, Germany.

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    More about this item

    Keywords

    unemployment inflow; potential benefit duration; unemployment insurance;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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