Working Paper: CEPR ID: DP1840
Authors: Olympia Bover; Manuel Arellano; Samuel Bentolila
Abstract: In this paper, we study the effects of unemployment benefit duration and the business cycle on unemployment duration. We construct durations for individuals entering unemployment from a longitudinal sample of Spanish men in 1987?94. Estimated discrete hazard models indicate that receipt of unemployment benefits significantly reduces the hazard of leaving unemployment. For instance, at durations of three months, the hazard for workers without benefits is twice as large as that for workers with benefits. Favourable business conditions increase the hazard of leaving unemployment. At sample-period magnitudes, this effect is significantly smaller than that of benefit receipt.
Keywords: unemployment duration; unemployment benefits; business cycle
JEL Codes: E32; J64; J65
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| unemployment benefits (J65) | unemployment duration (J64) |
| business cycle conditions (E32) | unemployment duration (J64) |
| unemployment benefits (J65) | hazard of leaving unemployment (J63) |
| business cycle conditions (E32) | hazard of leaving unemployment (J63) |
| temporary employment rate (J63) | hazard of leaving unemployment (J63) |