The effect of unemployment benefits on the probability of re-employment in Poland

This paper examines the impact of unemployment benefits on duration of unemployment in Poland. Polish Labor Force Surveys of 1994-1996 are the source of data. The data set includes both benefit recipients and unemployed persons without benefits as a reference group. Nonparametric and semiparametric estimation procedures are applied. There is strong evidence that unemployment benefits decrease the probability of leaving unemployment during the first six-nine months, but the probability of entering employment rises dramatically just prior to unemployment benefit exhaustion. The disincentive effect is more pronounced for women (especially married) than for men. The paper also considers the influence of other factors on the duration of unemployment.