Effekter af en toårig dagpengeperiode på beskæftigelse og ledighed: En foreløbig evaluering af dagpengereformen

Abstract:

This paper contains a preliminary evaluation of a recent Danish labour market reform,which reduced the potential unemployment benefit duration from four to two years. Theempirical strategy relies on a comparison of unemployment spells before and after thereform. A duration model is estimated to control for observable characteristics of theunemployed and business cycle variation. The latter is crucial since the applied timeperiod contains the financial crisis and thus a dramatic change in the employment opportunities. For this reason and since the reform has not yet been fully implemented,identification may be weak and the results should be interpreted only as suggestive.

Based on estimations of the duration model the paper finds that the reduction of the potentialbenefit duration has reduced average expected unemployment duration by 3-5weeks. The effects on structural employment and unemployment are assessed by convertingthe estimated hazard rates into levels for employment and unemployment. Thisis done within an equilibrium model of the labour market with three states: employment,unemployment and outside the labour force. Overall the analysis with considerableuncertainty finds that total employment is improved by at least 10.000 persons correspondingto an increase in the employment rate by almost ½ pct.point.