Switching from an inclining to a zero-level unemployment benefit profile: Good for work incentives?

Bart Cockx; Koen Declercq; Muriel Dejemeppe; Leda Inga; Bruno Van der Linden

doi:10.1016/j.labeco.2020.101816

Switching from an inclining to a zero-level unemployment benefit profile: Good for work incentives?

Bart Cockx, Koen Declercq, Muriel Dejemeppe^*, Leda Inga, Bruno Van der Linden

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

This paper evaluates the impact on the transition to work of a policy reform in Belgium that restricted the access to a specific unemployment insurance scheme for young labor market entrants. This scheme entitles youths with no or little labor market experience to unemployment benefits after a waiting period of one year. As of 2015, the Belgian government unexpectedly scrapped benefit eligibility for youths who start the waiting period at the age of 24 or older. The reform implied a change from an inclining to a flat rate (zero-level) benefit profile. We use a difference-in-differences approach to identify the causal impact of this reform on fresh university graduates. Our main finding is that this reform only increases the transition to very short-lived jobs.

Original language	English
Article number	101816
Number of pages	13
Journal	Labour Economics
Volume	64
DOIs	https://doi.org/10.1016/j.labeco.2020.101816
Publication status	Published - 1 Jun 2020
Externally published	Yes
Event	31st Annual Conference of the European-Association-of-Labour-Economists (EALE) - Uppsala, Sweden Duration: 19 Sept 2019 → 21 Sept 2019 Conference number: 31 https://www.ifau.se/en/Activities/Former-courses-and-conferences/eale-conference-2019/

JEL classifications

j64 - Unemployment: Models, Duration, Incidence, and Job Search
j65 - "Unemployment Insurance; Severance Pay; Plant Closings"
j68 - Mobility, Unemployment, and Vacancies: Public Policy

Keywords

Youth unemployment
Unemployment insurance
Policy evaluation
Difference-in-differences
POTENTIAL DURATION
MATCH QUALITY
INSURANCE
LIQUIDITY
JOBS

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10.1016/j.labeco.2020.101816

Cite this

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title = "Switching from an inclining to a zero-level unemployment benefit profile: Good for work incentives?",

abstract = "This paper evaluates the impact on the transition to work of a policy reform in Belgium that restricted the access to a specific unemployment insurance scheme for young labor market entrants. This scheme entitles youths with no or little labor market experience to unemployment benefits after a waiting period of one year. As of 2015, the Belgian government unexpectedly scrapped benefit eligibility for youths who start the waiting period at the age of 24 or older. The reform implied a change from an inclining to a flat rate (zero-level) benefit profile. We use a difference-in-differences approach to identify the causal impact of this reform on fresh university graduates. Our main finding is that this reform only increases the transition to very short-lived jobs.",

keywords = "Youth unemployment, Unemployment insurance, Policy evaluation, Difference-in-differences, POTENTIAL DURATION, MATCH QUALITY, INSURANCE, LIQUIDITY, JOBS",

author = "Bart Cockx and Koen Declercq and Muriel Dejemeppe and Leda Inga and {Van der Linden}, Bruno",

year = "2020",

month = jun,

day = "1",

doi = "10.1016/j.labeco.2020.101816",

language = "English",

volume = "64",

journal = "Labour Economics",

issn = "0927-5371",

publisher = "Elsevier",

note = "31st Annual Conference of the European-Association-of-Labour-Economists (EALE), EALE ; Conference date: 19-09-2019 Through 21-09-2019",

url = "https://www.ifau.se/en/Activities/Former-courses-and-conferences/eale-conference-2019/",

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TY - JOUR

T1 - Switching from an inclining to a zero-level unemployment benefit profile

T2 - 31st Annual Conference of the European-Association-of-Labour-Economists (EALE)

AU - Cockx, Bart

AU - Declercq, Koen

AU - Dejemeppe, Muriel

AU - Inga, Leda

AU - Van der Linden, Bruno

N1 - Conference code: 31

PY - 2020/6/1

Y1 - 2020/6/1

N2 - This paper evaluates the impact on the transition to work of a policy reform in Belgium that restricted the access to a specific unemployment insurance scheme for young labor market entrants. This scheme entitles youths with no or little labor market experience to unemployment benefits after a waiting period of one year. As of 2015, the Belgian government unexpectedly scrapped benefit eligibility for youths who start the waiting period at the age of 24 or older. The reform implied a change from an inclining to a flat rate (zero-level) benefit profile. We use a difference-in-differences approach to identify the causal impact of this reform on fresh university graduates. Our main finding is that this reform only increases the transition to very short-lived jobs.

AB - This paper evaluates the impact on the transition to work of a policy reform in Belgium that restricted the access to a specific unemployment insurance scheme for young labor market entrants. This scheme entitles youths with no or little labor market experience to unemployment benefits after a waiting period of one year. As of 2015, the Belgian government unexpectedly scrapped benefit eligibility for youths who start the waiting period at the age of 24 or older. The reform implied a change from an inclining to a flat rate (zero-level) benefit profile. We use a difference-in-differences approach to identify the causal impact of this reform on fresh university graduates. Our main finding is that this reform only increases the transition to very short-lived jobs.

KW - Youth unemployment

KW - Unemployment insurance

KW - Policy evaluation

KW - Difference-in-differences

KW - POTENTIAL DURATION

KW - MATCH QUALITY

KW - INSURANCE

KW - LIQUIDITY

KW - JOBS

U2 - 10.1016/j.labeco.2020.101816

DO - 10.1016/j.labeco.2020.101816

M3 - Article

SN - 0927-5371

VL - 64

JO - Labour Economics

JF - Labour Economics

M1 - 101816

Y2 - 19 September 2019 through 21 September 2019

ER -

Switching from an inclining to a zero-level unemployment benefit profile: Good for work incentives?

Abstract

JEL classifications

Keywords

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Cite this