Arbeitspapier

Labor force participation, job search effort and unemployment insurance in the laboratory

How the provision of unemployment benefits affects employment and unemployment is a debated issue. In this paper, we aim at complementing theoretical and empirical contributions to this debate with a laboratory experiment: We simulate a job market with search effort and labor force participation decisions while varying the maximum length of unemployment benefit eligibility. Our results reveal two separable, opposing effects: Individuals within the labor force search with lower effort when unemployment benefits are extended. However, individuals are more likely to participate in the labor force and to actively search for a job. Concerning employment, the second effect dominates so that unemployment benefits raise employment.

Sprache
Englisch

Erschienen in
Series: Kiel Working Paper ; No. 2149

Klassifikation
Wirtschaft
Macro-Based Behavioral Economics: General‡
Labor Force and Employment, Size, and Structure
Unemployment Insurance; Severance Pay; Plant Closings
Thema
Job Search
Employment
Labor Force Participation
Unemployment Insurance
Economic Recession
Laboratory
Experiment

Ereignis
Geistige Schöpfung
(wer)
Lechthaler, Wolfgang
Ring, Patrick
Ereignis
Veröffentlichung
(wer)
Kiel Institute for the World Economy (IfW)
(wo)
Kiel
(wann)
2020

Handle
Letzte Aktualisierung
20.09.2024, 08:23 MESZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Lechthaler, Wolfgang
  • Ring, Patrick
  • Kiel Institute for the World Economy (IfW)

Entstanden

  • 2020

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