The effect of unemployment benefits on the probability of re-employment inPoland

This paper examines the impact of unemployment benefits on duration of unem ployment in Poland. Polish Labor Force Surveys of 1994-1996 are the source of data. The data set includes both benefit recipients and unemployed perso ns without benefits as a reference group. Nonparametric and semiparametric estimation procedures are applied. There is strong evidence that unemployme nt benefits decrease the probability of leaving unemployment during the fir st six-nine months, but the probability of entering employment rises dramat ically just prior to unemployment benefit exhaustion. The disincentive effe ct is more pronounced for women (especially married) than for men. The pape r also considers the influence of other factors on the duration of unemploy ment.