Unemployment and Subsequent Employment Stability: Does Labour Market Policy Matter?

Melike Wulfgramm, Lukas Fervers

Research output: Working paperResearch

Abstract

This paper analyses the effect of unemployment insurance generosity and active labour market policy on reemployment stability in Europe. Using EU‐SILC and OECD data, we conduct discrete time survival analyses with shared frailty specification to identify policy effects at the micro and macro level. Empirical evidence suggests that unemployment benefit receipt is associated with longer reemployment duration at the individual level. Furthermore, countries with more generous unemployment insurance and higher ALMP spending show a more sustainable reintegration record of previously unemployed workers. These results point to a policy trade‐off between the well‐confirmed disincentive and locking‐in effect of unemployment benefits and ALMP programmes on the one hand, and their positive effect on reemployment stability on the other hand.
Original languageEnglish
Number of pages25
Publication statusPublished - 2013
SeriesIZA Discussion Paper
Volume7193

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Employment stability
Unemployment
Labour market policy
Re-employment
Unemployment benefits
Unemployment insurance
Discrete-time
Trade-offs
Generosity
Workers
Empirical evidence
Frailty
Active labour market policy

Cite this

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Unemployment and Subsequent Employment Stability: Does Labour Market Policy Matter? / Wulfgramm, Melike; Fervers, Lukas.

2013.

Research output: Working paperResearch

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