Do Benefit Hikes Damage Job Finding? Evidence from Swedish Unemployment Insurance Reforms

In 2001 and 2002, Sweden introduced several unemployment insurance reforms. A major innovation in the first reform was the introduction of a two-tiered benefit structure for some unemployed individuals. This system involved supplementary compensation during the first 20 weeks of unemployment. The 2002 reform retained the two-tiered benefit structure but involved also substantial benefit hikes for spells exceeding 20 weeks. This paper examines how these reforms affected transitions from unemployment to employment. We take advantage of the fact that the reforms had quasi-experimental features where the 'treatments' differed considerably among unemployed individuals. We find that the reforms had strikingly different effects on job finding among men and women. The two reforms in conjunction are estimated to have increased the expected duration of unemployment among men but to have decreased the duration of unemployment among women. The overall effect on the duration of unemployment is not statistically different from zero. However, the reforms reduced job finding among men who remained unemployed for more than 20 weeks. Copyright 2007 The Authors; Journal compilation 2007 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd..

Comprehensive Education for the Unemployed - Evaluating the Effects on Unemployment of the Adult Education Initiative in Sweden

This paper evaluates the effects on unemployment in Sweden of the Adult Education Initiative (AEI) which during its run from 1997 to 2002 offered adult education to the unemployed at compulsory or upper secondary level. The AEI is compared with the vocational part of Labor Market Training (LMT) using unemployment incidence and unemployment duration as outcome variables, both measured immediately after completion of the programs. For unemployment incidence, selection on unobservables is taken into account by using a bivariate probit model. The analysis of unemployment duration considers both selection bias and censored observations. The results indicate lower incidence following participation in the AEI, but also - significant at the 10 per cent level - longer duration. Copyright 2005 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd.