Unemployment insurance agencies may combat moral hazard by punishing refusals to apply to assigned vacancies. However, the possibility to report sick creates an additional moral hazard, since during sickness spells, minimum requirements on search behavior do not apply. This reduces the ex ante...

We develop a model of job search and use it to assess the effects that the Brazilian unemployment benefit system has on exit rates from unemployment. In our setup, unemployed workers receive job offers from the formal and informal sectors and decide whether to accept them or wait. Only jobs in...

In 2001-02, Argentina experienced a wrenching economic crisis. Plan Jefes, implemented in May 2002, was Argentina's institutional response to the increase in unemployment and poverty triggered by the crisis. The program provided a social safety net and appears to have successfully protected some...

We explore the far-reaching implications of replacing current unemployment benefit (UB) systems by an unemployment accounts (UA) system. Under the UA system, employed people are required to make ongoing contributions to their UAs and the balances in these accounts are available to them during...

This paper provides a comprehensive evaluation of benefit sanctions, i.e. temporary reductions in unemployment benefits as punishment for noncompliance with eligibility requirements. In addition to the effects on unemployment durations, we evaluate the effects on post-unemployment employment...

We study how changes in the maximum benefit duration affect the inflow into unemployment in the Netherlands. Until August 2003, workers who became unemployed after age 57.5 were entitled to unemployment benefits until the age of 65, after which they would receive old age pensions. This...

Our paper investigates the relative effects of wage subsidies and further vocational training on the subsequent employment prospects of previously unemployed program participants. First, we outline a theoretical approach based on a firm's hiring decision. For the relative effectiveness of both...

This paper estimates the causal effect of long-term unemployment on wages. Job search theory implies that if Unemployment Insurance (UI) extensions do not affect wages conditional on the month of unemployment exit, then reservation wages do not bind on average. Then, UI extensions affect mean...

This paper provides a simple, yet general framework to analyze the optimal time profile of benefits during the unemployment spell. We derive simple sufficient-statistics formulae capturing the insurance value and incentive costs of unemployment benefits paid at different times during the...

The Swedish labour market and social policy is aimed at facilitating flexibility in the labourmarket. The active labour market policy and the design of the social security pension systemare two frequently mentioned examples of that policy...