The Effect of Unemployment Insurance Sanctions on the Transition Rate from Unemployment to Employment
Social Science Research Network
This paper analyzes the effect of unemployment insurance sanctions on the transition rate f o m unemployment to employment. Sanctions are punitive benefits reductions that are supposed to make recipients comply with certain minimum requirements concerning search behavior. We use a unique set of administrative micro data covering the whole population of individuals who started collecting unemployment insurance in the Netherlands in 1992. To deal with the selectivity of the occurrence of a
... urrence of a sanction we simultaneously model the process by which unemployed get a sanction and the process by which they find jobs. We exploit the fact that some respondents experience multiple spells. The authors thank the Dutch Social Security Council (SVr) and its successor CTSV for making the data available t o them. Pi Mullenders of the SVs and CTSV provided useful information on the data and the way they were collected. The authors wish to thank Sweder van Wijnbergen, David Card, Geert hdder and Maarten Lindeboom for very useful comments on earlier drafts of this paper. Gerard 3 , van den Berg acknowledges financial support of the Royal Netherlands Academy of Arts and Sciences. work on the "black labor market". More than 90% concerns the search-related reasons mentioned above.