Poland on the dole: The effect of reducing the unemployment benefit entitlement period during transition

We analyse the unemployment benefit regime change that occurred in Poland in December 1991 using data from the Polish Labour Force Survey. Before December 1991, the entitlement period to unemployment benefits was unlimited. Thereafter, it was reduced to 12 months (with a few exceptions). Using the difference-in-differences approach within a hazard rate framework, we find that the regime change did not have a significant effect on the duration of unemployment. The results thus give credence to the view that the unlimited entitlement period of the old unemployment benefit regime was not the main culprit for the long durations of unemployment in Poland, although the generous eligibility criteria may have contributed to the increase in the incidence of registered unemployment at the beginning of the transition process. Received: 21 May 1997/Accepted: 15 March 1999     

Duration dependence and heterogeneity in French youth unemployment durations

This paper investigates the degree to which the individual exit rate out of unemployment for young job seekers changes as a function of the elapsed unemployment duration. We use a nonparametric estimation method for population data on outflows from different duration classes. The method also provides estimates of the amount of unobserved heterogeneity in these data. We explicitly take into account that individual exit rates are affected by the business cycle. The method is applied to population data on young French unemployed job seekers. The results are used for policy recommendations. Received: 17 October 1996/Accepted: 23 July 1998     

Cyclical variations in unemployment duration

In this paper I study how individual unemployment durations vary over the business cycle, using unemployment spells of a sample of Danish workers. A compositional, an outflow, and a residual calendar-time component are identified, and they all contribute to explaining the variations in unemployment duration. Based on the analysis it is concluded that long-term unemployment is a phenomenon that is associated with periods of high unemployment, but nothing should prevent the long-term unemployed finding jobs again as aggregate unemployment eventually starts falling. In particular, there is no evidence of negative duration dependence, not even at long durations, and not when aggregate unemployment is high. Received: 7 December 1998/Accepted: 24 August 1999     

The duration of unemployment in Russia

This paper uses longitudinal survey data to assess factors affecting the duration of unemployment in Russia. We examine four types of marginalised labour force participants, according to ILO guidelines and survey responses, and we estimate duration models for each type. It turns out that the sets of characteristics with the strongest effects on the duration are remarkably similar across the different unemployment definitions and model specifications. Therefore, despite the formidable practical measurement problems, problematic groups of individuals can actually be identified. Received: 27 January 1999/Accepted: 27 January 2000     

Residential location and youth unemployment: The economic geography of school-to-work transitions

In response to increased international policy attention to youth unemployment this study investigates post-secondary school transitions of school leavers. Multinomial logit models are estimated for male and female German youth. The models control for individual, parent, and household characteristics, for those of the youth's region of residence and local labor markets. The findings suggest that immigrant youth has particularly low participation rates in continued education, and that youth unemployment is centered in high unemployment states and metropolitan areas. More generous academic benefit policies seem to be correlated with increased academic enrollment, and men's transitions to the military do reflect recent changes in defense policies. Received: 30 November 1999/Accepted: 3 August 2000     

Youth unemployment and government policy

Young people of working age tend to be particularly prone to labor market inefficiencies that keep their wages excessively high and their employment excessively low. These inefficiencies are usually magnified through unemployment benefit systems. This paper examines how these problems can be tackled through “employment vouchers,” i.e. hiring subsidies or tax breaks for the unemployed. It examines how vouchers to the young unemployed should differ from those to the adult unemployed. The employment vouchers considered here reduce unemployment and impose no cost on the government, since they are financed by the induced fall in government expenditures on unemployment benefits. Among other things, we find that young workers should receive lower vouchers as displacement of the old rises and as deadweight from providing vouchers to the old increases.     

The unemployment insurance compensation experience of immigrants in Canada, 1980-1988

This paper utilizes a new data set, compiled by Citizenship and Immigration Canada, Revenue Canada and Statistics Canada, to examine the unemployment experience of Canadian immigrant cohorts over the time period 1980 to 1988. Using the records of unemployment insurance benefits of persons who immigrated to Canada in those years and who filed income tax returns, the unemployment experiences of those people are compared by landing year, gender, level of education, language ability, and country of last permanent residence. The determinants of the proportion of each immigrant cohort that received unemployment insurance benefits are estimated by relating the proportions to landing year, duration of time in Canada, and labour market conditions. Briefly, we find no obvious influences on UI receipt behaviour following the immigration reforms of 1982. However, the recession of 1981–82 had a major impact on incomes which did not recover until 5 or 6 years later. Nevertheless, more generous UI benefits did raise slightly the likelihood of UI receipts. Received: 5 December 1995 / Accepted: 14 August 1996     

吉林省城镇就业、失业和劳动参与的现状和对策

依据劳动经济理论,应用吉林省的微观数据,从劳动力的人口特征、受教育程度特征、户籍特征和地区差异等角度,研究吉林省失业率、就业率和劳动参与率的现状。针对吉林省城镇劳动就业中存在的问题,提出树立就业优先、发展新兴产业与第三产业、促进中小企业发展、健全劳动力市场体系和健全失业保险制度的政策建议。     

A cohort perspective of the effect of unemployment on fertility

This work offers an explanation for the apparent contradiction between empirical work that finds a negative relationship between unemployment and fertility, and theoretical work that emphasizes the lower opportunity cost of childbearing while unemployed. I reconcile these perspectives by distinguishing between two forms of unemployment. The first form is structural unemployment, while the second form is cyclical unemployment, a less permanent component of unemployment that is linked to the economic cycle. I apply a cohort-based model to study both effects over the life cycle using panel data methods applied to a sample of developed countries. My results show that higher levels of structural unemployment decrease fertility, but that the effects of cyclical variations in unemployment depend to a large extent on the age at which they are experienced. Cyclical reductions in the unemployment level mostly result in increases in fertility rates. However, for some age groups, positive variations in the cyclical component of unemployment can also have a positive impact on fertility.     

Links between labor supply and unemployment: theory and empirics

A flow model of labor market participation is used to describe how various exogenous variations jointly affect unemployment and participation and provides short-run identification restrictions of a structural VAR. In some countries, fast rising female participation may have had a moderate short- and medium-run impact on unemployment rates. A variance decomposition exercise indicates that, in Continental Europe, participation is driven in the short run by unemployment shocks, whereas in the USA, it is driven by participation shocks (demography, immigration). Unemployment in Europe is driven by participation shocks, whereas in the USA, it is driven by unemployment shocks.      

Immigration as a commitment device

This paper shows that the admittance of immigrants who are on average less skilled than natives can be part of a support-maximizing government policy despite a general political bias in favour of the poor. We make this point in a simple model with redistributive unemployment insurance. Once wage contracts are binding, the government has an incentive to increase the unemployment benefit, which leads to excessive unemployment. Affecting the political balance within the constituency, immigrants can serve as a commitment device against this time inconsistency. We show that this possibility can be greatly promoted by restrictions on political naturalization.

Voluntary income sharing and the design of unemployment insurance

This paper uses a model of search unemployment to discuss the interaction between publicly provided insurance and informal insurance through voluntary income sharing, e.g., between spouses. Income sharing reduces the optimal level of public unemployment insurance. While it is always individually rational for partners to share income, the effect of voluntary income sharing on welfare will be negative unless partners can either observe each other's search behavior or are sufficiently altruistic towards each other. The model is also used to examine a family-based policy. The welfare gains from using such policy are argued to be small. Received: 14 December 2000/Accepted: 5 November 2001     

The changing relationship between unemployment and total fertility

The aim of this paper is to investigate whether there has been a fundamental change in the relationship between economic conditions and fertility. We use panel data methods to study the short-term changes in total fertility and the unemployment rate in a range of Organisation for Economic Co-operation and Development (OECD) countries from 1957 to 2014. We find that although fertility was counter-cyclical before 1970, with good economic times being associated with lower fertility, since then it has become pro-cyclical, with good economic times being associated with higher fertility.     

Changes in inequality and unemployment over the 1980s: comparative cross-national responses

This paper reviews the research evidence regarding high and persistent unemployment in the western European nations and widening inequality in the United States and selected European countries. It has been suggested that both of these problems are due to fundamental economic shifts in labor demand within the more industrialized world that have led to declines in the demand for less skilled workers: The effect on countries with more regulated labor markets was rising unemployment, while in less regulated labor markets it was rising wage inequality. The paper considers the evidence for this hypothesis, as well as the research questions and policy issues that it raises.The author thanks Rebecca London and Leslie Moscow for research assistance.     

Stepping stones for the unemployed: the effect of temporary jobs on the duration until (regular) work

Transitions from unemployment into temporary work are often succeeded by a transition from temporary into regular work. This paper investigates whether temporary work increases the transition rate to regular work. We use longitudinal survey data of individuals to estimate a multi-state duration model, applying the ‘timing of events’ approach. The data contain multiple spells in labour market states at the individual level. We analyse results using novel graphical representations, which unambiguously show that temporary jobs shorten the unemployment duration, although they do not increase the fraction of unemployed workers having regular work within a few years after entry into unemployment.     

Testing local level labor force and unemployment projections

The labor force projections perform well, even for small areas, which suggests that changes in local labor force participation rates can be approximated by national changes. In fact, the mean absolute percent errors are low even when the previously calculated population projections are used. The unemployment projections do not do as well, and using 1980 census labor force data instead of previously calculated labor force projections offers no improvement in the results. A two-step study is needed to determine why the errors are so large. First, the state level changes from 1970 to 1980 should be compared with national changes to determine the difference in unemployment rate changes by race and sex. Second, state level data on the occupational mix should be examined for the relationship between this and the changes in state level unemployment rates by race and sex. It is hypothesized that the first step will show that even state level changes in unemployment rates by race and sex cannot be well approximated by the national changes and the second step will show that some of the variation can be explained by state differences in occupational mix. Further studies should be made to determine how the calculation of national changes affects the results. Changes in labor force participation rates seem to follow trends, and therefore extrapolation may not have much effect on the results. Although using the actual changes in unemployment from 1970 to the latest year available as a proxy for the changes from 1970 to the target year may have a serious detrimental effect on the unemployment projections, if some of the variation in the national changes in race and sex can be explained and some adjustments made, the actual changes may be the best proxy to use.     

Do Immigrants Suffer More From Job Loss? Unemployment and Subjective Well-being in Germany

This study asks whether immigrants suffer more from unemployment than German natives. Differences between these groups in pre-unemployment characteristics, the type of the transition into unemployment, and the consequences of this transition suggest that factors intensifying the negative impact of unemployment on subjective well-being are more concentrated in immigrants than in natives. Based on longitudinal data from the German Socio-Economic Panel Study (1990–2014; N = 34,767 persons aged 20 to 64; N = 210,930 person-years), we used fixed-effects models to trace within-person change in subjective well-being across the transition from employment into unemployment and over several years of continued unemployment. Results showed that immigrants’ average declines in subjective well-being exceeded those of natives. Further analyses revealed gender interactions. Among women, declines were smaller and similar among immigrants and natives. Among men, declines were larger and differed between immigrants and natives. Immigrant men showed the largest declines, amounting to one standard deviation of within-person change over time in subjective well-being. Normative, social, and economic factors did not explain these disproportionate declines. We discuss alternative explanations for why immigrant men are most vulnerable to the adverse effects of unemployment in Germany.     

Wage and (un-)employment effects of an ageing workforce

Given the empirical fact that workers of different ages are not perfect substitutes in production, this paper explores how change in the age pattern affects wages and (un)employment. We develop a general equilibrium model where wages for young and old workers are set by monopoly unions. Contrary to the common wisdom on this topic, we show that an increase in the relative number of older workers has no effect on young and old unemployment. If, however, unions attach a higher weight to the wishes of the old, the unemployment rate of the old (young) will increase (decrease). In this case, we observe a redistribution of wage income from the young to the old.     

Extracting the causal component from the intergenerational correlation in unemployment

This paper examines the intergenerational correlation in unemployment in Norway and discusses and estimates two approaches for extracting the causal component: sibling differences and the use of parental unemployment occurring after the child’s outcome as control for the unobserved family heterogeneity. Confirming existing evidence, I find a substantial intergenerational correlation in unemployment. Almost half of this is due to observed family heterogeneity. The causal effect is found to be statistically insignificant by both identification strategies, but while the estimated effect is negative on the sample made for the sibling-difference approach, this finding is not replicated on a less selective sample.

Growth and unemployment in an OLG economy with public pensions

This paper develops an overlapping generations model including (1) a productive externality as an engine of endogenous growth and (2) wage setting by trade unions as the cause of unemployment. Within this framework, the paper considers growth and unemployment affected by public pensions under the following two types of pension system: the proportionate pension system where only the contributors, that is, the employed, receive pensions, and the lump-sum pension system where both the employed and the unemployed receive pensions. It is shown that public pensions create a trade-off between growth and employment in the former system, whereas they produce no trade-off in the latter.