The current study shows that the disincentive effects of unemployment benefits exist even during a period of deep recession. The study uses recent data for unemployment benefit recipients in Estonia – a country where the rise in unemployment during the global financial crisis was the highest...

This paper uses a unique dataset about unemployment insurance recipients and their exits to employment in Estonia to investigate the effects of benefits on unemployment duration. The administrative data used clearly pinpoints total unemployment spells and exits to employment. Both nonparametric...