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Title:How Changes in BenefitsEntitlement Affect Job-Finding : Lessons from the Slovenian "Experiment" PDF Logo
Authors:Vodopivec, Milan
van Ours, Jan C.
Issue Date:2004
Series/Report no.:IZA Discussion paper series 1181
Abstract:In 1998 the Slovenian UI system was drastically reformed. The reform reduced the potential duration of unemployment benefits substantially and simultaneously improved employment services offered to, and monitoring of, the recipients. We find that the reduction in potential benefit duration had a positive effect on the exit rate out of unemployment – both to employment and to other destinations – at various durations of unemployment spells and for many categories of unemployed workers. We also identify a clear spike in the exit rate out of unemployment in the month unemployment benefits expire (and a smaller spike in the month thereafter), and for males an increase of job-finding rate in the third month of unemployment, a likely consequence of a reduction of the level of benefit that occurs at that point. Interestingly, post-unemployment wages of recipients were not affected after the change of the law, suggesting that higher job-finding rates following the reduction of benefits were not produced by reduced reservation wages (higher acceptance probability) but rather more effective job-search activity.
Subjects:unemployment insurance
potential benefit duration
job finding rates
postunemployment wages
JEL:H55
J64
J65
C41
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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