HOW CHANGES IN FINANCIAL INCENTIVES AFFECT THE DURATION OF UNEMPLOYMENT Abstract

@inproceedings{Lalive2004HOWCI,
  title={HOW CHANGES IN FINANCIAL INCENTIVES AFFECT THE DURATION OF UNEMPLOYMENT Abstract},
  author={Rafael Lalive},
  year={2004}
}
This paper studies how changes in the two key parameters of unemployment insurance – the benefit replacement rate (RR) and the potential duration of benefits (PBD) – affect the duration of unemployment. In 1989, the Austrian government made unemployment insurance more generous by changing, simultaneously, the maximum duration of regular unemployment benefits and the earnings replacement ratio. We find that increasing the replacement ratio has much weaker disincentive effects than increasing the… CONTINUE READING
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