What are the consequences of a reform of the Finnish unemployment insurance system?

In March 2000 the Finnish minister of finance, Sauli Niinisto, put forward demands for a restructuring of the unemployment insurance system. In this p aper I show, with the help of empirical analysis, that the minister's sugge stions may have the desired impact. A stepwise reduction of the benefit lev el and a shortening of the entitled benefit period may reduce the unemploym ent spells of people with earnings-related unemployment benefits. It should , however, be pointed out that the total effect may not necessarily be a lo wer structural unemployment rate.