Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236225 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14194
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Many countries have a two-tiered unemployment compensation system which provides earnings-related unemployment insurance for a limited period of time and less generous unemployment assistance thereafter. This study evaluates the effects of a reform in Finland that increased the level of unemployment assistance by 22%. The reform led to a drop of 9% in the unemployment exit hazard, which can be attributed to fewer exits to both employment and inactivity. The implied elasticities suggest that a 10% increase in unemployment assistance reduces the unemployment exit hazard by 4% and the job finding hazard by 6%. These effects are relatively small compared to the existing evidence on the effects of unemployment insurance benefits.
Subjects: 
unemployment assistance
labor market subsidy
hazard rate
unemployment duration
JEL: 
J64
J68
Document Type: 
Working Paper

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