Reducing unemployment benefit duration to increase job finding rates: a systematic review.

Trine Filges,Anne-Marie Klint Jørgensen,Anders Bruun Jonassen

doi:10.4073/csr.2018.2

Abstract

Reducing unemployment benefit duration to increase job finding rates: a systematic review.

Highlights

Introduction of Unemployment Insurance SavingsAccounts in Chile: Job Search, Moral Hazard and Income EffectsFigura & BarnichonThe Effects of Unemployment Benefits on Unemployment and Labour ForceParticipation: Evidence from 35 Years of Benefits ExtensionsAmerican Economic ReviewDissertation, University of ChicagoBoard of Governors of the Federal Reserve System (U.S.)
To the best of our knowledge, this is the first systematic review analysing the magnitude of the effect of shortening the maximum duration of unemployment benefit entitlement on the job finding rate
The review finds a surprisingly low number of studies with a sufficiently low risk of bias to enter a synthesis of the effect size of shortening the maximum duration of unemployment benefit entitlement

Summary

Introduction

Introduction of Unemployment Insurance SavingsAccounts in Chile: Job Search, Moral Hazard and Income EffectsFigura & BarnichonThe Effects of Unemployment Benefits on Unemployment and Labour ForceParticipation: Evidence from 35 Years of Benefits ExtensionsAmerican Economic ReviewDissertation, University of ChicagoBoard of Governors of the Federal Reserve System (U.S.). Unemployment benefit programmes protect individuals against loss of income and provide unemployed individuals with the possibility of finding a better match between their qualifications and job vacancies. If a shorter benefit period results in a significantly increased incentive for finding work, shortening the benefit eligibility period may reduce the share of long and unproductive job searches and thereby decrease the overall unemployment level. Benefit programmes protect individuals against loss of income and provide unemployed individuals with the possibility of finding a better match between their qualifications and job vacancies. This positive aspect of inducing workers to achieve better job matches has been shown, theoretically, to potentially increase economic efficiency (Acemoglu & Shimer, 1999; Marimon & Zilibotti, 1999). The gross initial replacement rate was around 50% in the US, while varying between 62% and 90% in the aforementioned European countries

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Conclusion