Unemployment Duration and the Restart Effect: Some Experimental Evidence

Dolton, Peter; O’Neill, Donal

doi:10.2307/2235254

Cited by 157 publications

(104 citation statements)

References 9 publications

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“…2 For the UK there has been a randomized experiment in 1986, the so-called Restart Programme, which randomly assigned claimants who had spent twelve months of benefits (later reduced to six) to treatment consisting in counseling and tighter enforcement of eligibility requirements, and was essentially a precursor to the JSA, except that the JSA did not include an explicit counselling element. The Restart seems to have significantly increased the exit rate from unemployment (Dolton and O'Neill, 1996) and to have had beneficial long-term employment effects for men treated, though not for women (Dolton and O'Neill, 2002).…”

Section: Related Workmentioning

confidence: 97%

The long-term effects of job search requirements: Evidence from the UK JSA reform

Petrongolo

2009

Journal of Public Economics

100

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S ABSTRACTThe Long-Term Effects of Job Search Requirements: Evidence from the UK JSA Reform * This paper investigates long-term returns from unemployment compensation, exploiting variation from the UK JSA reform of 1996, which implied a major increase in job search requirements for eligibility and in the related administrative hurdle. Search theory predicts that such changes should raise the proportion of non-claimant nonemployed, with consequences on search effort and labor market attachment, and lower the reservation wage of the unemployed, with negative effects on post-unemployment wages. I test these ideas on longitudinal data from Social Security records (LLMDB). Using a difference in differences approach, I find that individuals who start an unemployment spell soon after JSA introduction, as opposed to six months earlier, are 2.5-3% more likely to move from unemployment into Incapacity Benefits spells, and 4-5% less likely to have positive earnings in the following year. This latter employment effect only vanishes four years after the initial unemployment shock. Also, annual earnings for the treated individuals are lower than for the non-treated. These results suggest that while tighter search requirements were successful in moving individuals off unemployment benefits, they were not successful in moving them onto longlasting or better jobs, with fairly long lasting unintended consequences on a number of labor market outcomes.JEL Classification: J31, J64, J65

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Section: Related Workmentioning

confidence: 97%

The long-term effects of job search requirements: Evidence from the UK JSA reform

Petrongolo

2009

Journal of Public Economics

100

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“…Examples are the Youth Training Scheme that was introduced in 1983 (Dolton et al 1994) and the in 1987 introduced Restart programme to monitor more closely the long-term unemployed (Dolton and O'Neill 1996). Also the period of entitlement for unemployment benefits has been reduced from a maximum of 12 months to a maximum of 6 months for individuals who enter unemployment from October 1996 onwards.…”

Section: Sample Selectionmentioning

confidence: 99%

Unemployment durations and the pattern of duration dependence over the business cycle of British males

Kalwij

2009

Empir Econ

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This paper examines the relationship between the business cycle and individuals' duration in unemployment. I use multi-spell unemployment duration data of British males and monthly series of regional vacancies over unemployment, referred to as labour market tightness, to control for the business cycle. In line with most previous studies I find that the observed negative duration dependence on an aggregate level is explained by both sorting and strong negative individual duration dependence, and that the individual hazard of leaving unemployment increases with labour market tightness. The new empirical findings emerge from the interactions between individual duration dependence and the business cycle. Individual heterogeneity, and in particular the variation over the business cycle in the composition of the newly unemployed, explains most of the systematic variation over the business cycle in duration dependence on an aggregate level. Individual duration dependence does not vary over the business cycle in a way that would lend support to the predictions concerning this of the matching model of Lockwood (Rev Econ Stud 58:733-753, 1991) or the ranking model of Blanchard and Diamond (Rev Econ Stud 61:417-434, 1994).

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“…We 1 There is evidence that an increase in search intensity increases the transition rate from unemployment to employment (see Devine and Kiefer [1991] for a survey). Dolton and O'Neill (1996) and Gorter and Kalb (1996) estimate the effect of interviews that are supposed to provide advice and counseling to UI recipients. Both find a positive and lasting effect on the transition rate from unemployment to employment.…”

Section: Introductionmentioning

confidence: 99%

Punitive Sanctions and the Transition Rate from Welfare to Work

Berg

Klaauw

Ours

2004

Journal of Labor Economics

245

136

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In the Netherlands, the average exit rate out of welfare is dramatically low. Most welfare recipients have to comply with guidelines on job search effort that are imposed by the welfare agency. If they do not, then a sanction in the form of a temporary benefit reduction can be imposed. This article investigates the effect of such sanctions on the transition rate from welfare to work using a unique set of rich register data on welfare recipients. We find that the imposition of sanctions substantially increases the individual transition rate from welfare to work.We are grateful to the Welfare Agency (Dienst Sociale Zaken en Werkgelegenheid) of Rotterdam, and to Daan Spannenberg in particular, for kindly providing the data. We thank David Grubb, Jeff Smith, and Maarten Lindeboom for useful comments, and Michael Keane for useful information on the U.S. welfare system. Financial support from the Netherlands Ministry of Social Affairs and Employment is gratefully acknowledged. Contact the corresponding author, Bas van der Klaauw, at Klaauw@tinbergen.nl. 212Van den Berg et al.

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Unemployment Duration and the Restart Effect: Some Experimental Evidence

Cited by 157 publications

References 9 publications

The long-term effects of job search requirements: Evidence from the UK JSA reform

The long-term effects of job search requirements: Evidence from the UK JSA reform

Unemployment durations and the pattern of duration dependence over the business cycle of British males

Punitive Sanctions and the Transition Rate from Welfare to Work

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