Labor Seminars Amsterdam

Speaker(s)
Arne Uhlendorf (IZA)
Date
2009-12-08
Location
Amsterdam

We use a sharp discontinuity in the maximum duration of unemployment benefits in Germany, which increases from 12 months to 18 months atthe age of 45, to identify the effect of extended benefit duration on unemployment duration and post-unemployment outcomes. We find a “spike” in the reemployment hazard for the non-treated unemployed workers with 12 months benefit duration, which occurs close to benefit exhaustion. Although this leads to lower unemployment duration compared to their counterparts with 18 months benefit duration, we find that jobs accepted near and after benefit expiration are of worse quality in terms of duration and wages.