DP2061 Living Standards and Incentives in Transition: the Implications of Unemployment Insurance Exhaustion in Hungary

Author(s): John Micklewright, Gyula Nagy
Publication Date: January 1999
Keyword(s): Hungary, Incentives, living standards, Social Assistance, Unemployment Insurance
JEL(s): I38, J64, J65
Programme Areas: Transition Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=2061

The single most likely way to leave the unemployment insurance (UI) register in Hungary is not by getting a job but by exhausting entitlement to benefit. Two questions follow. First, what are the implications of the cessation of UI for living standards? Second, does UI exhaustion have much effect on the probability of getting a job through increasing incentives to work? We investigate these issues with a survey of persons exhausting entitlement to UI in Summer 1995, paying special attention to the household circumstances of the unemployed and to the probabilities of claiming and being awarded means-tested assistance benefit.