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Explaining the transitions out of unemployment in Spain: the effect of unemployment insurance

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  • Alfonso Alba-Ramirez

Abstract

A multinomial logit model and matched files from the Spanish Active Population Survey (EPA) are used to study transitions out of unemployment among men aged 20-59. In addition to demographic characteristics, other explanatory variables included in the regressions pertain to previous job characteristics and the spell of unemployment. In this article, special attention is paid to the impact of unemployment insurance benefits on the re-employment probability. Consistent with previous work, it is found that receipt of unemployment insurance is associated with lower probabilities of re-employment and of withdrawal from the labour force. More importantly, a differential effect of benefit receipt is obtained when comparing time periods before and after 1992. Indeed, in April of that year the labour authority made eligibility requirements for unemployment insurance more restrictive and curtailed benefit amounts.

Suggested Citation

  • Alfonso Alba-Ramirez, 1999. "Explaining the transitions out of unemployment in Spain: the effect of unemployment insurance," Applied Economics, Taylor & Francis Journals, vol. 31(2), pages 183-193.
    • Handle: RePEc:taf:applec:v:31:y:1999:i:2:p:183-193
    DOI: 10.1080/000368499324417
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    References listed on IDEAS

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    1. Alfonso Alba-Ramirez & Richard B. Freeman, 1990. "Jobfinding and Wages when Longrun Unemployment is Really Long: The Case of Spain," NBER Working Papers 3409, National Bureau of Economic Research, Inc.
    2. Olympia Bover & Manuel Arellano & Samuel Bentolila, 2002. "Unemployment Duration, Benefit Duration and the Business Cycle," Economic Journal, Royal Economic Society, vol. 112(479), pages 223-265, April.
    3. Olympia Bover & Manuel Arellano & Samuel Bentolila, 1996. "Unemployment duration, benefit duration, and the business cycle," Estudios Económicos, Banco de España, number 57.
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    1. Guell, Maia & Hu, Luojia, 2006. "Estimating the probability of leaving unemployment using uncompleted spells from repeated cross-section data," Journal of Econometrics, Elsevier, vol. 133(1), pages 307-341, July.
    2. Stephen Byrne & Martin D. O’Brien, 2017. "Understanding Irish Labour Force Participation," The Economic and Social Review, Economic and Social Studies, vol. 48(1), pages 27-60.
    3. Michael Kind, 2015. "A Level Playing Field: An Optimal Weighting Scheme of Dismissal Protection Characteristics," LABOUR, CEIS, vol. 29(1), pages 79-99, March.
    4. repec:zbw:rwirep:0121 is not listed on IDEAS
    5. P. Jenkins, Stephen & Garcia-Serrano, Carlos, 2000. "Re-employment probabilities for Spanish men: what role does the unemployment benefit system play?," ISER Working Paper Series 2000-17, Institute for Social and Economic Research.
    6. Maia Güell, 2001. "Fixed-Term Contracts and the Duration Distribution of Unemployment," CEP Discussion Papers dp0505, Centre for Economic Performance, LSE.
    7. repec:zbw:rwirep:0442 is not listed on IDEAS
    8. John P. Haisken-DeNew & Matthias Vorell, 2009. "Killing them with Kindness: Negative Distributional Externalities of Increasing UI Benefits," Ruhr Economic Papers 0121, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    9. Jacobo De UNA-ALvarez & M. Soledad Otero-GirALdez & Gema ALvarez-Llorente, 2003. "Estimation under length-bias and right-censoring: An application to unemployment duration analysis for married women," Journal of Applied Statistics, Taylor & Francis Journals, vol. 30(3), pages 283-291.
    10. Haisken-DeNew, John P. & Vorell, Matthias, 2009. "Killing them with Kindness: Negative Distributional Externalities of Increasing UI Benefits," Ruhr Economic Papers 121, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    11. Michael Kind, 2013. "A Level Playing Field – An Optimal Weighting Scheme of Dismissal Protection Characteristics," Ruhr Economic Papers 0442, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    12. Jacobo de Uña Álvarez & Gema Álvarez Llorente & Mª Soledad Otero Giráldez, 2004. "Estimation of time spent in unemployment for married women: An application at regional level," Working Papers 0410, Universidade de Vigo, Departamento de Economía Aplicada.

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