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An Empirical Evidence of Moral Hazard due to Unemployment Benefits

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  • Ohkusa, Y.

Abstract

This paper examines how the unemployment benefit (UB) affects the intensity or search effort of the unemployed, which is measured by the workin conditions of a new job resultin from search behavior, controllin for the endo eneity of the duration of unemployment. Estimation results show that the hirin probability of UB recipients is si nificantly lower than that of non-recipients, with the ma nitude bein approximately halved. Additionally, the workin conditions of new jobs of UB recipients are si nificantly worse than those of non-recipients with re ard to wa es, occupation and firm size.

Suggested Citation

  • Ohkusa, Y., 2000. "An Empirical Evidence of Moral Hazard due to Unemployment Benefits," ISER Discussion Paper 0511, Institute of Social and Economic Research, Osaka University.
    • Handle: RePEc:dpr:wpaper:0511
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    File URL: https://www.iser.osaka-u.ac.jp/library/dp/2000/dp0511.pdf
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    References listed on IDEAS

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    1. Katz, Lawrence F. & Meyer, Bruce D., 1990. "The impact of the potential duration of unemployment benefits on the duration of unemployment," Journal of Public Economics, Elsevier, vol. 41(1), pages 45-72, February.
    2. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, vol. 28(1), pages 85-101, April.
    3. Christofides, Louis N. & McKenna, C. J., 1995. "Unemployment insurance and moral hazard in employment," Economics Letters, Elsevier, vol. 49(2), pages 205-210, August.
    4. Acemoglu, D, 1996. "Good Jobs Versus Bad Jobs : Theory and Some Evidence," Working papers 96-33, Massachusetts Institute of Technology (MIT), Department of Economics.
    5. Ehrenberg, Ronald G & Oaxaca, Ronald L, 1976. "Unemployment Insurance, Duration of Unemployment, and Subsequent Wage Gain," American Economic Review, American Economic Association, vol. 66(5), pages 754-766, December.
    6. Narendranathan, W & Nickell, S & Stern, J, 1985. "Unemployment Benefits Revisited," Economic Journal, Royal Economic Society, vol. 95(378), pages 307-329, June.
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    Cited by:

    1. Yasushi Ohkusa, 2003. "Programme Evaluation of Unemployment Benefits in Japan: An Average Treatment Effect Approach," ISER Discussion Paper 0570, Institute of Social and Economic Research, Osaka University.
    2. Ohkusa, Yasushi, 2004. "Programme evaluation of unemployment benefits in Japan: An average treatment effect approach," Japan and the World Economy, Elsevier, vol. 16(1), pages 95-111, January.

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    More about this item

    Keywords

    UNEMPLOYMENT ; WORKING CONDITIONS ; WAGES;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • 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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