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HOW EFFECTIVE ARE UNEMPLOYMENT BENEFIT SANCTIONS? LOOKING BEYOND UNEMPLOYMENT EXIT
Author(s) -
Arni Patrick,
Lalive Rafael,
Van Ours Jan C.
Publication year - 2012
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.2289
Subject(s) - unemployment , earnings , sanctions , duration (music) , economics , hazard , affect (linguistics) , labour economics , quality (philosophy) , demographic economics , finance , macroeconomics , political science , psychology , art , philosophy , chemistry , literature , organic chemistry , communication , epistemology , law
SUMMARY This paper provides a comprehensive evaluation of the effects of benefit sanctions on post‐unemployment outcomes such as post‐unemployment employment stability and earnings. We use rich register data which allow us to distinguish between a warning that a benefit reduction may take place in the near future and the actual withdrawal of unemployment benefits. Adopting a multivariate mixed proportional hazard approach to address selectivity, we find that warnings do not affect subsequent employment stability but do reduce post‐unemployment earnings. Actual benefit reductions lower the quality of post‐unemployment jobs both in terms of job duration as well as in terms of earnings. Copyright © 2012 John Wiley & Sons, Ltd.