Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/63182
Authors: 
Røed, Knud
Westlie, Lars
Year of Publication: 
2007
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 2007,13
Abstract: 
Based on a sequence of reforms in the Norwegian unemployment insurance (UI) system, we show that activity-oriented UI regimes - i.e., regimes with a high likelihood of required participa-tion in active labor market programs, duration limitations on unconditional UI entitlements, and high sanction probabilities - deliver substantially shorter unemployment spells than pure income-insurance regimes. Soft constraints, in the form of activity requirements or small benefit cuts af-ter a pre-specified UI duration, have many of the same behavioral consequences as threats of complete benefit termination. Early introduction of a soft constraint appears particularly effec-tive; our results show that the expected unemployment duration falls by half a day for each week the soft constraint is moved ahead in the UI spell. Mild sanctions, in the form of temporary bene-fit terminations in response to inadequate search effort or excess choosiness, cause a significant rise in the job hazard.
Subjects: 
Competing risks
unemployment insurance
timing-of-events
NPMLE
MMPH
JEL: 
C14
C15
C41
J64
J65
J68
Document Type: 
Working Paper

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