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Unemployment Durations in West Germany Before and After the Reform of the Unemployment Compensation System during the 1980s

Author

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  • Fitzenberger Bernd

    (Albert Ludwigs-University Freiburg,Freiburg im Breisgau, Germany)

  • Wilke Ralf A.

    (University of Nottingham,Nottingham, England, United Kingdom of Great Britain and Northern Ireland)

Abstract

This paper analyzes empirically the distribution of unemployment durations in West Germany during the 1980s and 1990s. It therefore covers periods before and after the changes during the mid-1980s in the maximum entitlement periods for unemployment benefits for older unemployed. The analysis is based on the IAB employment subsample containing administrative data for about 500,000 individuals. Since these data only partly reveal the unemployment duration in an economic sense, we use a narrow and a wide proxy for unemployment. Our empirical analysis finds significant changes in the distribution of non-employment durations for older unemployed. At the same time, the distribution of unemployment durations between jobs remained unchanged after the reforms. Our findings clearly show that many firms and workers used the more beneficial laws as a part of early retirement packages. Surprisingly, for those workers who found and accepted a new job, we do not observe a prolongation of their search periods to a sizeable extent.

Suggested Citation

  • Fitzenberger Bernd & Wilke Ralf A., 2010. "Unemployment Durations in West Germany Before and After the Reform of the Unemployment Compensation System during the 1980s," German Economic Review, De Gruyter, vol. 11(3), pages 336-366, August.
    • Handle: RePEc:bpj:germec:v:11:y:2010:i:3:p:336-366
    DOI: 10.1111/j.1468-0475.2009.00479.x
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    More about this item

    Keywords

    Definition of unemployment; duration analysis; unemployment insurance;
    All these keywords.

    JEL classification:

    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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