Effects of Changes in the Unemployment Insurance Eligibility Requirements on Job Duration - Swedish Evidence

This paper investigates the impact of the unemployment insurance (UI) entrance requirement on employment duration among earlier unemployed in Sweden. I exploit changes in the rules taking place in 1994 and 1997 to study behavioural adjustments in the timing of job separation in 1992, 1996, and 1998, respectively. Performing across-year analyses with years involving different working requirements, I find some evidence of clustering of job exits at the time of UI qualification. By using predicted hazard rates for each week, I calculate an approximate 2.3-week extension in average employment duration between 1996 and 1998, due to the 5-week prolonging of the entrance requirement.