Department of Economics and Business Economics

Benefit reentitlement conditions in unemployment insurance schemes

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

The past employment history – employment requirements – is part of the eligibility conditions for unemployment insurance in most western countries. In a standard search-matching model, we show how employment requirements strengthen the reentitlement effect and thereby changes the trade-off between insurance and incentives in the design of the optimal insurance scheme. Deploying employment requirements for benefit eligibility may thus allow for both higher benefit levels and longer duration, and yet labor market performance is improved. When the need for insurance increases due to higher risk aversion, employment requirements becomes less lenient, and oppositely when the environment becomes more risky.

Original languageEnglish
JournalLabour Economics
Pages (from-to)27-39
Number of pages13
Publication statusPublished - 1 Jun 2018

    Research areas

  • EQUILIBRIUM, Incentives, Job-search, Reentitlement effects, SEARCH, Unemployment insurance

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