Petrongolo, Barbara (2009) The long-term effects of job search requirements: Evidence from the UK JSA reform. Journal of Public Economics, 93 (11-12). pp. 1234-1253. ISSN 0047-2727
Full text not available from this repository.Abstract
This paper investigates long-term returns from unemployment compensation, exploiting variation from the UK JSA reform of 1996, which implied a major increase in job search requirements for eligibility and in the related administrative hurdle. Search theory predicts that such changes should raise the proportion of nonclaimant nonemployed, with consequences on search effort and labor market attachment, and lower the reservation wage of the unemployed, with negative effects on post-unemployment wages. I test these ideas on longitudinal data from social security records (LLMDB). Using a difference in differences approach, I find that individuals who start an unemployment spell soon after JSA introduction, as opposed to 6 months earlier, are 2.5–3% more likely to move from unemployment into Incapacity Benefits spells, and 4–5% less likely to have positive earnings in the following year. This latter employment effect only vanishes 4 years after the initial unemployment shock. Also, annual earnings for the treated individuals are lower than for the non-treated. These results suggest that while tighter search requirements were successful in moving individuals off unemployment benefits, they were not successful in moving them onto stable or better jobs, with fairly long-lasting unintended consequences on a number of labor market outcomes
| Item Type: | Article |
|---|---|
| Official URL: | http://www.elsevier.com/wps/find/journaldescriptio... |
| Additional Information: | © 2009 Elsevier B.V. |
| Divisions: | Centre for Economic Performance Economics |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor |
| JEL classification: | J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J64 - Unemployment: Models, Duration, Incidence, and Job Search J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc. J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J65 - Unemployment Insurance; Severance Pay; Plant Closings |
| Date Deposited: | 21 Jan 2010 14:15 |
| Last Modified: | 03 Apr 2024 04:09 |
| URI: | http://eprints.lse.ac.uk/id/eprint/26722 |
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