Jan C. van Ours

Punitive Sanctions and the Transition Rate from Welfare to Work

In The Netherlands, the average exit rate out of welfare is dramatically low. Most welfare recipients have to comply with guidelines on job search effort that are imposed by the welfare agency. If they do not, then a sanction in the form of a temporarily benefit reduction can be imposed. This paper investigates the effect of such sanctions on the transition from welfare to work using a unique set of rich administrative data on welfare recipients in The Netherlands. We find that the imposition of sanctions substantially increases the individual transition rate from welfare to work. We also describe the other determinants of the transition from welfare to work.

Job Satisfaction and Family Happiness: The Part-time Work Puzzle

Using fixed effects ordered logit estimation, we investigate the relationship between part-time work and working hours satisfaction; job satisfaction; and life satisfaction. We account for interdependence within the family using data on partnered men and women from the British Household Panel Survey. We find that men have the highest hours-of-work satisfaction if they work full-time without overtime hours but neither their job satisfaction nor their life satisfaction are affected by how many hours they work. Life satisfaction is influenced only by whether or not they have a job. For women we are confronted with a puzzle. Hours satisfaction and job satisfaction indicate that women prefer part-time jobs irrespective of whether these are small or large. In contrast, female life satisfaction is virtually unaffected by hours of work. Women without children do not care about their hours of work at all, while women with children are significantly happier if they have a job regardless of how many hours it entails.

Vacancies and the recruitment of new employees

Little is known about the search strategy that employers use in their efforts to fill job vacancies. In this article, we analyze unique micro data to study this search strategy. We conclude that almost all vacancies are filled from a pool of applicants that is formed shortly after the posting of the vacancy. Hence, vacancy durations should be interpreted as selection periods and not as search periods for applicants.

Welfare-Improving Employment Protection

This paper derives new results on the welfare effects of employment protection. Using data from 17 OECD countries, we show that there exists an inverse U-shape relationship between employment protection and economic growth. Using a simple theoretical model with non-contractible specific investments, we show that over some range increasing employment protection does indeed raise welfare. We also show that the optimal level of employment protection depends on other labour market features, such as the bargaining power of workers and the existence of wage rigidities like the minimum wage.

Unemployment dynamics and duration dependence

A major issue in the analysis of unemployment durations concerns distinguishing genuine duration dependence of the exit rate out of unemployment from unobserved heterogeneity. We present a method for the nonparametric estimation of both phenomena, designed to be applicable to time-series data on aggregate outflows from different duration classes. The model explicitly takes into account that individual exit rates are affected by the business cycle and by seasonal effects. The method is applied to U.S. data. We find diverging duration effects among black and white individuals. However, except for white males, duration dependence is dominated by unobserved heterogeneity.A major issue in the analysis of unemployment durations concerns distinguishing genuine duration dependence of the exit rate out of unemployment from unobserved heterogeneity. The authors present a method for the nonparametric estimation of both phenomena, designed to be applicable to time-series data on aggregate outflows from different duration classes. The model explicitly takes into account that individual exit rates are affected by the business cycle and by seasonal effects. The method is applied to U.S. data. The authors find diverging duration effects among black and white individuals. However, except for white males, duration dependence is dominated by unobserved heterogeneity. Copyright 1996 by University of Chicago Press.

The Netherlands and the United Kingdom : A European Unemployment Miracle?

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Optimal Unemployment Insurance with Monitoring and Sanctions

This paper analyzes the design of optimal unemployment insurance in a search equilibrium framework where search effort among the unemployed is not perfectly observable. We examine to what extent the optimal policy involves monitoring of search effort and benefit sanctions if observed search is deemed insufficient. We find that introducing monitoring and sanctions represents a welfare improvement for reasonable estimates of monitoring costs; this conclusion holds both relative to a system featuring indefinite payments of benefits and a system with a time limit on unemployment benefit receipt. The optimal sanction rates implied by our calibrated model are much higher than the sanction rates typically observed in European labor markets.

How Shortening the Potential Duration of Unemployment Benefits Affects the Duration of Unemployment: Evidence from a Natural Experiment

In this article we investigate the disincentive effects of shortening the potential duration of unemployment insurance (UI) benefits. We identify these disincentive effects by exploiting changes in Slovenia’s unemployment insurance system—a “natural experiment” that involved substantial reductions in the potential duration of benefits for four groups of workers plus no change in benefits for another group (which served as a natural control). We find that the change had a positive effect on the exit rate from unemployment—to new jobs and other options—for unemployment spells of various lengths and for several categories of unemployed workers.

Expert Opinion and Compensation: Evidence from a Musical Competition

Pianists who achieve high scores in the Queen Elizabeth musical competition are rewarded by subsequent success. This is not surprising in itself, but it is not immediately clear whether this is caused by the score or because those who have high scores are better pianists. Data on eleven consecutive competitions make it possible to distinguish between the two explanations, since an unexpected situation allows us to use an instrumental variable (the randomly assigned order in which musicians appear at the competition), uncorrelated with ability, but correlated with the results of the competition.

Job Searchers, Job Matches and the Elasticity of Matching

This paper stresses the importance of a specification of the matching function, where the measure of job matches as a dependent variable, corresponds to the stock of job searchers. In many empirical studies on the matching function this requirement has not been fulfilled. In this paper, we show that using unemployment outflow to a job as measure of job matches. related to unemployment and vacancies, gives a higher elasticity of matching with respect to unemployment, compared to the same elasticity when the flow of filled vacancies is used as measure of job matches. We have specified and estimated matching functions for The Netherlands to illustrate our point.