Bringing Them In or Pushing Them Out? The Labor Market Effects of Pro-cyclical Unemployment Assistance Changes / Gerard Domènech-Arumí, Silvia Vannutelli.

Format:

Book

Author/Creator:

Domènech-Arumí, Gerard.

Contributor:

National Bureau of Economic Research.

Vannutelli, Silvia.

Series:

Working Paper Series (National Bureau of Economic Research) no. w30301.

NBER working paper series no. w30301

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2022.

Summary:

We exploit an unanticipated labor market reform to estimate the effects of pro-cyclical changes in long-term unemployment assistance (UA). In July 2012, Spain raised the minimum age to receive unlimited-duration UA from 52 to 55. Using a difference-in-differences design, we document that shorter benefits caused (i) shorter non-employment duration, especially among younger workers; (ii) higher labor force exit and other programs' take-up, especially among older workers; (iii) lower wages upon re-employment. The reform induced moderate government savings. Our results highlight the importance of considering the interplay with labor market conditions when designing long-term benefit schedules that affect workers close to retirement.

Notes:

Print version record

July 2022.