In this paper, we analyse the effects of an increase in the generosity of unemployment benefits on the duration of unemployment in Slovenia. Using registry data on the universe of Slovenian unemployment benefit recipients, we exploit legislative changes that selectively increased the replacement rates for certain groups of workers while leaving them unchanged for others. Applying this quasi-experimental approach, we find that increasing the replacement rate significantly decreased the hazard rate for exiting from unemployment to employment. Interestingly, the implementation of these legislative changes increasing the generosity of benefits coincided with a period of increased aggregate outflows from unemployment.
B.03 Paper at an international scientific conference
COBISS.SI-ID: 4701911