The Effect of Unemployment Compensation on the Rate of Unemployment in Great Britain

Differences in Unemployment Duration: A Regional or a Personal Problem?

“…'A common alternative to the micro approach is the macro approach which explains shifts in aggregate unemployment or unemployment duration by changes in aggregate demand and supply side factors (including social security benefit levels). See, among others, Maki and Spindler (1975) and Cubbin and Foley (1977). The macro approach has been criticized by Lancaster and Nickell (1980) because of the quite different results obtained as a consequence of the weakness of the data and the lack of a sound theoretical basis.…”

On Labour Market Policies and Aggregate Unemployment Outflows

“…A first message is that the replacement ratio has a strong negative effect on the unemployment exit rate. At the macro level, clear-cut conclusions have also been derived by Maki and Splindler (1975) and Grubel and Maki (1976): the replacement ratio has a significant positive effect on the unemployment rate. 12 A careful inspection of the data reveals that our results are in fact not surprising.…”

The effect of unemployment insurance on unemployment rate and average duration: evidence from pooled cross-sectional time-series data

“…These include looking at the impact of unemployment insurance on the reservation wage-levels, and thus on the average duration of unemployment (Feldstein and Poterba, 1984); the effect of the benefit-income ratio (replacement ratio) on the unemployment rate and the average duration (Chapin, 1971;Maki and Spindler, 1975;Cubin and Foley, 1977;Nickell, 1979;Wunnava and Henley, 1987); the effect of unemployment insurance on the quit rate (Hamermesh, 1979); and the differential impact of unemployment insurance on industrial sectors (Deere, 1991). Some of the studies, such as that of Maki and Spindler (1975) have explored the possibility of potential feedback effects between the replacement ratio and the unemployment rate. The rationale for doing this is that during periods of high unemployment, incomes may be lower which would cause the replacement ratio to be higher, allowing for possible simultaneity between the unemployment rate and replacement ratio.…”

“…The potential benefits of using such an approach are implicit in the studies done by Chapin (1971), Maki and Spindler (1975), Nickell (1979), Poterba and Feldstein (1984) and Wunnava and Henley (1987). Feldstein and Poterba reported that unemployment compensation raised an individual's reservation wage by providing a safety cushion, and so increased the length of time spent searching for a job, thus increasing the average duration of unemployment.…”