Unemployment durations in West-Germany before and after the reform of the unemployment compensation system during the 1980s

  • This paper analyzes empirically the distribution of unemployment durations in West- Germany before and after the changes during the mid 1980s in the maximum entitlement periods for unemployment benefits for elderly unemployed. The analysis is based on the comprehensive IAB employment subsample containing register panel data for about 500.000 individuals in West Germany. We analyze two proxies for unemployment since the data do not precisely measure unemployment in an economic sense. We provide a theoretical analysis of the link between the durations of nonemployment and of unemployment between jobs. Our empirical analysis finds significant changes in the distributions of nonemployment durations for older unemployed individuals. At the same time, the distribution of unemployment durations between jobs did not change in response to the reforms. Our findings are consistent with an interpretation that many firms and workers used the more bene cial laws as a part of early retirement packages but those workers who were still looking for a job did not reduce their search effort in response to the extension of the maximum entitlement periods. This interpretation is consistent with our theoretical model under plausible assumptions. JEL: C24, J64, J65

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Author:Bernd FitzenbergerORCiDGND, Ralf A. Wilke
Parent Title (German):Zentrum für Europäische Wirtschaftsforschung: Discussion paper ; No. [20]04,24 : Labour economics, human resources and social policy
Publisher:Zentrum für Europ. Wirtschaftsforschung
Place of publication:Mannheim
Document Type:Working Paper
Date of Publication (online):2005/04/11
Year of first Publication:2004
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2005/04/11
Tag:definition of unemployment; duration analysis; unemployment insurance
GND Keyword:Arbeitslosenversicherung; Reform; Flexible Altersgrenze; Arbeitslosigkeit; Dauer; Schätzung; Deutschland; Geschichte 1975-1997
Source:ZEW Discussion Paper ; 04-24
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht