scholarly journals Should Unemployment Benefits Decrease as the Unemployment Spell Lengthens?

2001 ◽  
Author(s):  
Tuomas Saarenheimo
Keyword(s):  
Unemployment Benefits ◽  
Unemployment Spell

Erratum

ILR Review ◽  
1979 ◽  
Vol 32 (4) ◽  
pp. 533-533
Author(s):  
John M. Barron ◽  
Otis W. Gilley
Keyword(s):  
Unemployment Insurance ◽  
Job Search ◽  
Search Process ◽  
Unemployment Benefits ◽  
Insurance Benefits ◽  
Search Intensity ◽  
Unemployment Spell ◽  
Disincentive Effect ◽  
The Impact ◽  
Job Search Intensity

The Impact of Unemployment Insurance on the Search Process A SERIOUS coding error in the data used in our recent article published in the April 1979 Review has been pointed out by Joe Stone of the Bureau of Labor Statistics. Our paper proposed a test of Mortensen's hy-pothesis that both future expected unem- ployment insurance benefits and benefits re-ceived during a current unemployment spell affect an individual's search intensity. Regression 1, which remains unchanged, still provides no support for Mortensen's proposed effect of unemployment insurance benefits to be received during the subse- quent unemployment spell on the current job-search intensity of the unemployed. Regression 3, which remains unchanged, still indicates a distortion in the search process-in particular in the methods of search chosen-for current recipients of unem- ployment insurance benefits and the un- employed who are eligible and have applied for these benefits. The error affects the results of the estimnation of Equation 2. It occurred because unemployed individuals who were eligible and had applied for benefits were assigned zero weeks left to receive these benefits rather than the maximum allowable duration of benefits according to the individual's state of residence. As a result, the value of unem- ployment insurance benefits for these individuals was inadvertently set equal to zero. Yet these individuals, other things equal, were shown in our original study to have a measured job-search intensity 74 percent higher than individuals currently receiving unemployment insurance, a difference related to the time involved in the ap- plication process rather than to actual job- search efforts. Reestimation of Equation 2 controlling for this effect and correcting for the measure- ment error in the value of unemployment benefits results in one important change. The coefficient on the value of unemployment insurance benefits, though still negative, is riot different from zero for standard significance levels. A serious consequence is that the traditional disincentive effect of unemployment insurance on search in- tensity is not supported by our test. One explanation for this finding may be that individuals with larger values of unemployment benefits have a greater incentive to overstate search intensity since such benefits are dependent on search activity.

scholarly journals The Optimal Timing of Unemployment Benefits: Theory and Evidence from Sweden

2018 ◽  
Vol 108 (4-5) ◽  
pp. 985-1033 ◽  
Author(s):  
Jonas Kolsrud ◽  
Camille Landais ◽  
Peter Nilsson ◽  
Johannes Spinnewijn
Keyword(s):  
Moral Hazard ◽  
Administrative Data ◽  
Time Profile ◽  
Optimal Timing ◽  
Unemployment Benefits ◽  
Replacement Rate ◽  
Sufficient Statistics ◽  
Theoretical Literature ◽  
Unemployment Spell ◽  
Robust Framework

This paper provides a simple, yet robust framework to evaluate the time profile of benefits paid during an unemployment spell. We derive sufficient-statistics formulae capturing the marginal insurance value and incentive costs of unemployment benefits paid at different times during a spell. Our approach allows us to revisit separate arguments for inclining or declining profiles put forward in the theoretical literature and to identify welfare-improving changes in the benefit profile that account for all relevant arguments jointly. For the empirical implementation, we use administrative data on unemployment, linked to data on consumption, income, and wealth in Sweden. First, we exploit duration-dependent kinks in the replacement rate and find that, if anything, the moral hazard cost of benefits is larger when paid earlier in the spell. Second, we find that the drop in consumption affecting the insurance value of benefits is large from the start of the spell, but further increases throughout the spell. In trading off insurance and incentives, our analysis suggests that the flat benefit profile in Sweden has been too generous overall. However, both from the insurance and the incentives side, we find no evidence to support the introduction of a declining tilt in the profile. (JEL D82, E21, E24, J64, J65)

Divergent Paths of Inequality in Turkey and Spain

2018 ◽  
Author(s):  
Ekrem Karakoç
Keyword(s):  
Political Parties ◽  
Household Income ◽  
Party System ◽  
Social Programs ◽  
Social Policies ◽  
Unemployment Benefits ◽  
Social Security Systems ◽  
Security Systems ◽  
Electoral Campaigns ◽  
Key Sectors

Using most similar design and process-tracing methodology, this chapter investigates the divergent outcomes in income inequality in Turkey and Spain. Even though social-security systems in both countries have been hierarchical, benefiting civil servants, the security apparatus, and workers in key sectors and others in formal sectors at the expense of the rest, they have adopted different social policies over time. This chapter discusses how Turkish governments, with a focus on 1983 to the present time, have designed contributory and noncontributory pensions, healthcare, and other social programs that have affected household income differently. In democratic Spain, however, pension-related policies and unemployment benefits have been dominant forms of social policy, but the Spanish party system has not created major incentives for political parties to utilize these policies in electoral campaigns until recently. This chapter ends with a discussion of how social policies in Turkey and Spain have affected inequality since the two nations transitioned to democracy.

Wealth and preferences for redistribution: The effects of financial assets and home equity in 31 countries

2021 ◽  
pp. 002071522098808
Author(s):  
Liza G Steele
Keyword(s):  
Household Wealth ◽  
Welfare States ◽  
Social Effects ◽  
Financial Assets ◽  
Unemployment Benefits ◽  
Home Equity ◽  
Income Equality ◽  
Financial Wealth ◽  
Preferences For Redistribution ◽  
The Social

How does wealth affect preferences for redistribution? In general, social scientists have largely neglected to study the social effects of wealth. This neglect was partially due to a dearth of data on household wealth and social outcomes, and also to greater scholarly interest in how wealth has been accumulated rather than the social effects of wealth. While we would expect household wealth to be an important component of attitudes toward inequality and social welfare policies, research in this area is scarce. In this study, the relationship between wealth and preferences for redistribution is examined in cross-national global and comparative perspective using data on 31 countries from the 2009 wave of the International Social Survey Programme (ISSP), the first wave of that study to include measures of wealth. The findings presented compare the effects of two types of wealth—financial assets and home equity—and demonstrate that there are differences in effects by asset type and by redistributive policy in question. Financial wealth is more closely associated with attitudes about income equality, while home equity is more closely associated with attitudes about unemployment benefits. Moreover, while the upper categories of financial wealth have the largest negative effects on support for income equality, it is the middle categories of home equity that are most strongly associated with opposition to unemployment benefits. Effects also differ by country, but not in patterns that theories of comparative welfare states nor political economy would adequately explain.

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