The Effects of Reducing the Entitlement Period to Unemployment Insurance Benefits

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 14.01.2014, 12:15 - 13:30


Presentation by 

Bas van der Klaauw (Vrije Universiteit Amsterdam)


This paper exploits a substantial reform of the Dutch UI law to study the effect of the entitlement period on job finding and subsequent labor market outcomes. We find that reducing the entitlement period increases the job finding rate, but decreases the job quality. Unemployed workers accept more often temporary jobs with lower wages and more working hours. However, because they also change jobs more frequently long-run labor market outcomes are more favorable. The reform increased total post-unemployment earnings indicating that the positive effects on job finding and job turnover dominate the negative effect on job quality is larger than the effect on wages.

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