Resumen de Unemployment Duration, Benefit Duration, and the Business Cycle.Versión Revisada

Olympia Bover, Manuel Arellano, Samuel Bentolila

• In this paper we study the effects of unemployment benefit duration and the business cycle on unemployement duration. We construct durations for individuals entering unemployment from a longitudinal sample of Spanish men in 1987-1994. Estimated discrete hazard models indicates that receipt of unemployment benefits significantly reduces the hazard of leaving unemployment. For instance, at durations of 3 months, the hazard for workers without benefits is twice as large as that for workers with benefits. Favorable business conditions increase the hazard of leaving unemployment. At sample-period magnitudes, this effect is significantly smaller than that of benefit receipt.