مزایای بیمه بیکاری جزئی و نرخ انتقال به کار منظم

In Finland, unemployed workers who are looking for a full-time job but take up a part-time or very short full-time job may qualify for partial unemployment benefits. In exchange for partial benefits, these applicants must continue their search of regular full-time work. This study analyzes the implications of working on partial benefits for subsequent transitions to regular employment. The timing-of-events approach is applied to distinguish between causal and selectivity effects associated with the receipt of partial benefits. The results suggest that partial unemployment associated with short full-time jobs facilitates transitions to regular employment. Also part-time working on partial benefits may help men (but not women) in finding a regular job afterwards.

The ultimate goal of most unemployed job seekers is to find a permanent full-time jobs (i.e. a “regular” job). If such jobs are not readily available, a job seeker may also consider part-time jobs or very short full-time jobs as a temporary solution. But wage income from such “irregular” jobs can be relatively low compared to unemployment benefits, making them difficult to accept for some unemployed workers. For this reason, several countries, including all the Nordic countries, many other European countries, and the United States, have made partial (or supplementary/adjusted) unemployment benefits available for job seekers who accept an irregular job when no better jobs are available. If short full-time and part-time jobs facilitate subsequent transitions to regular work, subsidizing working in such jobs via the unemployment compensation system can enhance labor market efficiency. The opponents argue that partial benefits discourage workers from finding regular work through high replacement rates and extended benefit durations. The question of obvious policy interest is whether working on partial benefits induces or hinders the unemployed from finding a regular (unsubsidized) job, and hence escaping from compensated unemployment. Given the large literature on other aspects of the unemployment compensation system and on other forms of subsidized employment, surprisingly little effort has gone into studying the role of partial benefits and their implications for subsequent labor market outcomes. 1 This study addresses the issue in the context of the Finnish labor market. In Finland, only job seekers who are looking for full-time work can qualify for unemployment insurance (UI) benefits. When no full-time regular work is available, UI recipients who take up a part-time job or a full-time job with the duration of less than one month (two weeks since 2003) may receive partial benefits on top of wage income. The partial benefit can be collected for a limited period of time, which depends on the ratio of the partial benefit to the regular UI benefit. Workers on partial benefits are partially unemployed, and they are expected to continue their search for regular work. The objective of partial benefits is to encourage the unemployed to also take up jobs that are less than suitable, through financial incentives. Although the partial benefits have been available since 1985, very little is known about the recipients and how their behavior and subsequent labor market outcomes are affected.2 This paper focuses on two main questions: Who among UI recipients go to part-time and short full-time jobs that qualify for partial benefits, and what are the implications of working on partial benefits for the transitions out of unemployment into regular work? Empirical analysis is based on register data on individuals who lost their jobs and entered full-time unemployment in 1999 or 2000. The main concern in modelling the implications of working on partial benefits is the potential endogeneity of the receipt of partial benefits. For example, it is possible that workers who find regular work more easily also have less trouble finding irregular jobs. As a consequence, they may be overrepresented among partial benefit recipients, which can bias the estimates unless the selection process is appropriately accounted for. A bivariate mixed proportional hazard model is used to deal with the selection problem. The model specifies a transition rate from compensated (partial/full-time) unemployment to regular work, which depends on the past and current experiences of partial unemployment along with other determinants. The timing of the receipt of partial benefits is modelled by specifying a transition rate from full-time unemployment to partial benefits. These transition rates are interrelated by the way of observed and unobserved characteristics. The causal effects of working on partial benefits on the transition rate to regular work is distinguished from the selectivity effects by exploiting random variation in the timing of the receipt of partial benefits. This is known as the timing-of-events approach (Abbring and Van den Berg, 2003). The effect of working on partial benefits is divided into two parts: the change in the transition rate to regular work while receiving partial benefits (instant effect) and the change following the return to full-time unemployment (delayed effect). These effects are allowed to vary with the type of partial unemployment (subsidized part-time or short full-time work), the timing and duration of the partial benefit period, and the average wage of the subsidized job. The results indicate a higher transition rate to partial benefits for women than for men. The transition rate to partial benefits also varies with occupation, education, and living region. Subsidized employment associated with short full-time jobs is found to facilitate transitions to regular work during and after a spell of partial benefits. The strong instant effect suggests a possibility that short full-time jobs are used as a probation device by employers, providing a stepping stone to longer employment contracts for some applicants. There is no evidence that subsidized part-time jobs would be used for the same purpose. Nevertheless, for men taking a part-time job that qualifies for partial benefits may still reduce the expected duration until regular work, owing to a positive delayed effect, although this evidence is not conclusive. Subsidized part-time work has no positive effects for women. The rest of the paper is organized as follows. In the next section, it is argued that the partial benefit scheme differs notably from other wage subsidy schemes. The section also discusses the likely effects of such a policy and gives an overview of some related studies. Section 3 introduces the Finnish unemployment compensation system, with an emphasis of potential incentive effects associated with partial benefits. Differences in the partial benefit schemes between Finland and other countries are also discussed. Section 4 describes the underlying data sources and sample restrictions. Descriptive evidence is presented in Section 5, which is followed by the econometric analysis in Section 6. The final section concludes, with some policy recommendations.

This study provides evidence that short full-time jobs—and part-time jobs for men—combined with partial benefits can speed up the process out of unemployment into regular work. The significant and economically large effects were found for subsidized short full-time work. When the applicant takes up a short full-time job that qualifies for partial benefits, the hazard rate to regular employment increases almost by one-half. This may indicate that short full-time jobs are used as a probation device by employers, leading to longer employment contracts for some applicants. The effect is stronger for short full-time jobs taken at the later stages of unemployment, so the long-term unemployed benefit most. The delayed effect turned out to be even larger, as the employment hazard almost doubles after a completed spell of partial benefits associated with short full-time work. Subsidized part-time jobs are less effective in improving the chances of finding a regular job. For men no instant effects were found but there is some evidence of a positive long-run effect. Women's part-time working on partial benefits has no long-lasting effects and may even have a lock-in effect in some cases. In the absence of notable lock-in effects, the recipients of partial benefits evidently gain from the scheme. Working on partial benefits raises the applicant's income compared to full-time unemployment, and reduces the expected remaining time until regular employment in most cases. Subsidized partial employment periods are likely to be financially attractive also for the society. Such periods reduce the average benefit duration, and workers on partial benefits who would otherwise be full-time unemployed contribute to production, collect less unemployment benefits, and pay more taxes. Since there are no major direct costs, apart from extra benefit bureaucracy, the partial benefit scheme seems to be relatively attractive from a cost-benefit perspective. Therefore, it provides a reasonable alternative or a supplementary scheme to more traditional labor market policy measures, such as training courses and job placement programs, which can be subject to substantial direct costs. This policy conclusion should be taken with some caution, however, because there can be various substitution effects and hidden costs. The results of the paper give too rosy a picture of the role of partial benefits if the existence of the partial benefit scheme per se discourages some unemployed from searching for regular jobs. This question cannot be addressed with the available data, as it would require experimental data. But it seems unlikely that such an ex ante effect could be very strong, and the traditional labor market programs are subject to the same concern. The partial benefit scheme can also induce some jobless people who are looking for part-time work only, and hence should not be eligible for unemployment benefits, to register as unemployed job seekers to gain from partial benefits. The finding of a large group of female applicants with a relatively high hazard to partial benefit and a relative low hazard to regular employment due to unobserved characteristics gives some indirect support for this worry. To mitigate the possible adverse effects of moral hazard behavior, the partial benefit scheme should therefore be implemented along with intensive monitoring of job search efforts and of availability for regular work. Finally, it should be stressed that working on partial benefits may also have positive implications for the unemployed that were not recovered in our analysis. It may not only speed up the process of moving into regular work but also lead to better matches in terms of higher pay and longer expected job duration. Unfortunately, a lack of detailed information on jobs in the data prevents us from analyzing the quality of jobs taken by the unemployed. Whether working on partial benefits leads to better regular jobs or not is an important topic for future work.