Unemployment Benefit Exhaustion: Incentive Effects on Job-Finding Rates

Purpose: This systematic review studied the impact of exhaustion of unemployment benefits on the exit rate out of unemployment and into employment prior to benefit exhaustion or shortly thereafter. Method: We followed Campbell Collaboration guidelines to prepare this review, and ultimately located 12 studies for final analysis and interpretation. Twelve studies could be included in the data synthesis. Results: We found clear evidence that the prospect of exhaustion of benefits results in a significantly increased incentive for finding work. Discussion: The theoretical suggestion that the prospect of exhaustion of benefits results in an increased incentive for finding work has been confirmed empirically by measures from seven different European countries, the United States, and Canada. The results are robust in the sense that sensitivity analyses evidenced no appreciable changes in the results. We found no strong indication of the presence of publication bias.