Working Paper: CEPR ID: DP3311
Authors: Rafael Lalive; Jan C. van Ours; Josef Zweimüller
Abstract: This Paper investigates the effectiveness of benefit sanctions in reducing unemployment duration. Data from the Swiss labour market allow making a distinction between the effect of a warning that a person is not complying with eligibility requirements and the effect of the actual enforcement of a benefit sanction. We find that both warning and enforcement have a positive effect on the exit rate out of unemployment. Moreover, the stricter the sanction policy the shorter the duration of unemployment. This can be taken as evidence of a strong ex-ante effect of a strict sanction policy.
Keywords: benefit sanctions; monitoring; unemployment duration
JEL Codes: J64; J65; J68
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Warning regarding non-compliance (H26) | Exit rate from unemployment (J65) |
| Enforcement of benefit sanctions (I38) | Exit rate from unemployment (J65) |
| Strictness of sanction policy (Z28) | Duration of unemployment (J64) |