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Modeling Financial Incentives to get Unemployment Back to Work

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Abstract

s19dec9.dvi Center for Economic Research No. 2000-02 MODELING FINANCIAL INCENTIVES TO GET UNEMPLOYED BACK TO WORK By Jan Boone and Jan C. van Ours January 2000 ISSN 0924-7815 Prgholqj Ilqdqfldo Lqfhqwlyhv wr Jhw Xqhpsor|hg Edfn wr Zrun Mdq Errqh � Mdq F1 ydq Rxuv | Ghfhpehu 4</ 4<<< Devwudfw Zh prgho krz xqhpsor|phqw ehqh�w vdqfwlrqv 0 ehqh�w uhgxfwlrqv wkdw duh lpsrvhg li xqhpsor|hg gr qrw frpso| zlwk mre vhdufk jxlgholqhv 0 di0 ihfw xqhpsor|phqw1 Lq rxu dqdo|vlv zh �qg wkdw qrw rqo| plfur h�hfwv frqfhuqlqj wkh ehkdylru ri lqglylgxdo xqhpsor|hg zrunhuv duh uhohydqw/ exw dovr pdfur0vslooryhu h�hfwv iurp wkh dgglwlrqdo fuhdwlrq ri ydfdqflhv/ zklfk ruljlqdwhv iurp wkh lqfuhdvhg h�hfwlyhqhvv ri oderu vxsso|1 Zh dg0 yrfdwh wkdw iru d jlyhq orvv lq zhoiduh iru wkh xqhpsor|hg ehqh�w vdqfwlrqv duh pruh h�hfwlyh lq uhgxflqj xqhpsor|phqw wkdq dq dfurvv wkh erdug uhgxfwlrq lq wkh uhsodfhphqw udwh1 MHO frghv= K88/ M98/ M9; Nh|zrugv= xqhpsor|phqw ehqh�wv/ �qdqfldo lqfhqwlyhv/ vdqfwlrqv1 Wkh dxwkruv zdqw wr wkdqn Mlp Doeuhfkw/ ]yl Hfnvwhlq/ Shwhu Iuhgulnvvrq/ Ehuwlo Kropoxqg/ Vxvdq Yurpdq/ sduwlflsdqwv ri wkh Ghfhpehu 4<<< Oderu VhdufkZrunvkrs dw wkh Wlqehujhq Lqvwlwxwh/ sduwlflsdqwv ri wkh Vhswhpehu 4<<< Hxurshdq V|psrvlxp lq Oderu Hfrqrplfv lq Dpphuvhh dqg hvsh0 fldoo| Odqv Eryhqehuj iru xvhixo frpphqwv1 � Ghsduwphqw ri Hfrqrplfv/ Wloexuj Xqlyhuvlw|/ FhqwHU dqg FSE Qhwkhuodqgv Exuhdx iru Hfrqrplf Srolf| Dqdo|vlv> hpdlo= M1ErrqhCnxe1qo1 | Ghsduwphqw ri Hfrqrplfv/ Wloexuj Xqlyhuvlw|/ FhqwHU/ Lqvwlwxwh iru Oderu Vwxglhv +RVD,/ L]D dqg FHSU> hpdlo= ydqrxuvCnxe1qo1 Dgguhvv= Ghsduwphqw ri Hfrqrplfv/ Wloexuj Xqlyhuvlw|/ S1R1 Er{ <3486/ QO�8333 OH Wloexuj/ Wkh Qhwkhuodqgv1 4 Lqwurgxfwlrq Xqhpsor|phqw dqg hvshfldoo| orqj0whup xqhpsor|phqw lv kljk lq pd| RHFG0 frxqwulhv1 Wkh pdlq sureohp lv wkdw zrunhuv vwd| xqhpsor|hg iru wrr orqj +vhh iru h{dpsoh Od|dug/ Qlfnhoo dqg Mdfnpdq +4<<4, dqg Ehdq +4<<7,,1 Wkh odfn ri �qdqfldo lqfhq

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