Poland on the dole: The effect of reducing the unemployment benefit entitlement period during transition

Abstract:

We analyse the unemployment benefit regime change that occurred in Poland in December 1991 using data from the Polish Labour Force Survey. Before December 1991, the entitlement period to unemployment benefits was unlimited. Thereafter, it was reduced to 12 months (with a few exceptions). Using the difference-in-differences approach within a hazard rate framework, we find that the regime change did not have a significant effect on the duration of unemployment. The results thus give credence to the view that the unlimited entitlement period of the old unemployment benefit regime was not the main culprit for the long durations of unemployment in Poland, although the generous eligibility criteria may have contributed to the increase in the incidence of registered unemployment at the beginning of the transition process.