DP3311 The Effect of Benefit Sanctions on the Duration of Unemployment
|Author(s):||Rafael Lalive, Jan C. van Ours, Josef Zweimüller|
|Publication Date:||April 2002|
|Keyword(s):||benefit sanctions, monitoring, unemployment duration|
|JEL(s):||J64, J65, J68|
|Programme Areas:||Labour Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=3311|
This Paper investigates the effectiveness of benefit sanctions in reducing unemployment duration. Data from the Swiss labour market allow making a distinction between the effect of a warning that a person is not complying with eligibility requirements and the effect of the actual enforcement of a benefit sanction. We find that both warning and enforcement have a positive effect on the exit rate out of unemployment. Moreover, the stricter the sanction policy the shorter the duration of unemployment. This can be taken as evidence of a strong ex-ante effect of a strict sanction policy.