IZA DP No. 3016: How Do Different Entitlements to Unemployment Benefits Affect the Transitions from Unemployment into Employment?
published in: Economics Letters, 2008, 101 (3), 206-209
In Portugal duration of benefits is exclusively age determined while replacement rates are to all intents and purposes uniform. We exploit differences in potential maximum duration of benefits for nearly matched pairs of individuals who differ in age by one year and in potential maximum duration of benefits by three months. In specifications that take account of unobserved individual heterogeneity, while controlling for pure age effects on escape rates, we find that lower maximum benefit duration is associated with substantially higher quarterly rates of job finding in the range 53 to 106 percent.