Citation

Discussion Paper Details

Please find the details for DP1521 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Benefit Duration and Unemployment Entry: Quasi-experimental Evidence for Austria

Author(s): Rudolf Winter-Ebmer

Publication Date: December 1996

Keyword(s): Elderly Workers, Implicit Contracts, Unemployment Entry and Unemployment Insurance

Programme Area(s): Human Resources

Abstract: This paper studies the impact of a selective extension of unemployment benefit duration on the incidence of unemployment in Austria. As the new law applies only to elderly workers in certain regions of the country after June 1988, a quasi-experimental situation is created. Unemployment entry is found to rise by between four and eleven percentage points due to the new law. The findings are explained by a breach of an implicit contract; elderly workers receive wages above their marginal product in order to elicit higher effort. Dismissal of elderly workers is now easier because more generous unemployment insurance makes reputation loss for the firm less severe.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1521

Bibliographic Reference

Winter-Ebmer, R. 1996. 'Benefit Duration and Unemployment Entry: Quasi-experimental Evidence for Austria'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1521