Unemployment insurance schemes face a well-known trade-off between providing income support to those out of work and …

This paper discusses the effects of a higher unemployment benefit replacement rate on unemployment durations …, employment and earnings. A reform of the Swiss unemployment insurance in July 2003 increased the replacement rate by up to 5 … approach. The increase in the replacement rate increased unemployment durations, while it did not affect post-unemployment …

, whereby special focus is placed on unemployment duration. The results of the study indicate that in contrast to reservation … wages, offered wages decline considerably with duration of unemployment. This is the main reason that ratios of reservation … wages to offered wages increase rapidly with duration of unemployment; on average, reservation wages begin to exceed offered …