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Increasing incentives for reemployment

Author

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  • Juha Kettunen

    (The Research institute of the Finnish Economy)

Abstract

This paper studies the incentives of unemployed workers for reemployment using search models and semi-parametric econometric methods of reemployment. The incentives for reemployrnent can be increased by suspending the protective rules regarding labour mobility stipulated in the Finnish Unemployment insurance Act and reducing the benefits after a fixed period of unemployment. The econometric results support such an interpretation. The unemployment benefits have first a negative effect on the probability of becoming employed, but after three months this effect vanishes when the rules of the system become stricter.

Suggested Citation

  • Juha Kettunen, 1993. "Increasing incentives for reemployment," Finnish Economic Papers, Finnish Economic Association, vol. 6(1), pages 51-60, Spring.
    • Handle: RePEc:fep:journl:v:6:y:1993:i:1:p:51-60
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    File URL: http://taloustieteellinenyhdistys.fi/images/stories/fep/f1993_1f.pdf
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    References listed on IDEAS

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    2. Calomiris, Charles W & Hubbard, R Glenn, 1990. "Firm Heterogeneity, Internal Finance, and 'Credit Rationing.'," Economic Journal, Royal Economic Society, vol. 100(399), pages 90-104, March.
    3. Hamermesh, Daniel S., 1987. "The demand for labor in the long run," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 8, pages 429-471, Elsevier.
    4. Stephen Nickell & Sushil Wadhwani, 1991. "Employment Determination in British Industry: Investigations Using Micro-Data," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(5), pages 955-969.
    5. repec:bla:econom:v:53:y:1986:i:210(s):p:s1-22 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Erkki Koskela & Roope Uusitalo, 2003. "The Un-Intended Convergence: How the Finnish Unemployment Reached the European Level," CESifo Working Paper Series 878, CESifo.
    2. Saarela, Jan, 2006. "Replacement rates and labour market behaviour," Socio-Economic Planning Sciences, Elsevier, vol. 40(3), pages 187-211, September.
    3. Uusitalo, Roope & Verho, Jouko, 2007. "The effect of unemployment benefits on re-employment rates: evidence from the Finnish UI-benefit reform," Working Paper Series 2007:21, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Kyyrä, Tomi & Pesola, Hanna & Rissanen, Aarne, 2017. "Unemployment Insurance in Finland: A Review of Recent Changes and Empirical Evidence on Behavioral Responses," Research Reports 184, VATT Institute for Economic Research.
    5. Erkki Koskela & Roope Uusitalo, 2003. "The Un-Intended Convergence: How the Finnish Unemployment Reached the European Level," CESifo Working Paper Series 878, CESifo.
    6. Kettunen, Juha, 2002. "Labour mobility of unemployed workers," Regional Science and Urban Economics, Elsevier, vol. 32(3), pages 359-380, May.
    7. Kettunen, Juha, 1996. "Duration-dependent features of unemployment insurance," Economics Letters, Elsevier, vol. 51(1), pages 115-121, April.
    8. Fatma El-Hamidi, 2006. "Why Does the MENA Region Have Such High Unemployment Rates?," Working Paper 270, Department of Economics, University of Pittsburgh, revised Sep 2006.
    9. Kettunen, Juha, . "Essays on Wages, Job Tenure and Unemployment Duration in the Finnish Labour Market," ETLA A, The Research Institute of the Finnish Economy, number 25, June.
    10. repec:zbw:bofrdp:2004_006 is not listed on IDEAS

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    More about this item

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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