Publisert i
Journal of the European Economic Association (forthcoming)
Sammendrag
Based on a sequence of reforms in the Norwegian unemployment insurance (UI) system, we show that soft duration constraints and mild sanction practices significantly increase UI claimants’ job hazard rates. Soft duration constraints appear to have almost the same behavioral impacts as hard constraints. In particular, the spikes at benefit exhaustion are of similar magnitude, irrespective of the kind of services and benefits that are offered after exhaustion, e.g., in terms of follow-on benefits and access to paid labor market programs. We find that extensive use of activity requirements backed up by mild sanctions effectively speed up the job search process and cut unemployment duration.