Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2011:18: Why do Some Studies Show that Generous Unemployment Benefits Increase Unemployment Rates? A Meta-Analysis of Cross-Country Studies

Jaewon Kim ()
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Jaewon Kim: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden

Abstract: This paper investigates the hypothesis that generous unemployment benefits give rise to high levels of unemployment by systematically reviewing 34 cross- country studies. In contrast to conventional literature surveys, I perform a meta-analysis which applies regression techniques to a set of results taken from the existing literature. The main finding is that the choice of the primary data and estimation method matter for the final outcome. The control variables in the primary studies also affect the results.

Keywords: meta-analysis; cross-country study; unemployment; benefits replacement rate; benefit duration

JEL-codes: C42; J65

38 pages, May 5, 2011

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