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Threat effects of monitoring and unemployment insurance sanctions: evidence from two reforms

Author

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  • Lombardi, Stefano

    (IFAU - Institute for Evaluation of Labour Market and Education Policy)

Abstract
This paper studies threat effects of unemployment insurance (UI) benefit sanctions on job exit rates. Using a difference-in-differences design, I exploit two reforms of the Swedish UI system that made monitoring and sanctions considerably stricter at different points in time for different jobseeker groups. The results show that men and long-term unemployed individuals respond to the tighter monitoring and the threat of sanctions by finding jobs faster, whereas women do not. I also estimate the effect of receiving a sanction on the job exit rates and find significant sanction imposition effects. However, a decomposition exercise shows that these sanction imposition effects explain very little of the overall reform effects, so that most of the reform effects arise through threat effects. A direct policy implication is that the total impact of monitoring and sanctions may be severely underestimated when focusing solely on the effects on those actually receiving sanctions.

Suggested Citation

  • Lombardi, Stefano, 2019. "Threat effects of monitoring and unemployment insurance sanctions: evidence from two reforms," Working Paper Series 2019:22, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    • Handle: RePEc:hhs:ifauwp:2019_022
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    References listed on IDEAS

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    Cited by:

    1. Antoine Bertheau & Edoardo Maria Acabbi & Cristina Barceló & Andreas Gulyas & Stefano Lombardi & Raffaele Saggio, 2023. "The Unequal Consequences of Job Loss across Countries," American Economic Review: Insights, American Economic Association, vol. 5(3), pages 393-408, September.
    2. Marco Caliendo & Robert Mahlstedt & Gerard J. van den Berg & Johan Vikström, 2023. "Side effects of labor market policies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(2), pages 339-375, April.

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    More about this item

    Keywords

    monitoring and sanctions; unemployment insurance; threat effects;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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