The effect of unemployment benefits in Türkiye on job search duration and subsequent jobs: A comparison between benefit recipients and non-recipients

Unemployment insurance is a key income protection mechanism and labour market policy tool designed to partially and temporarily compensate for income losses following unemployment. Nowadays, the fact that many people receive from unemployment benefit and that it affects both the economy and the decisions and behaviours of the individuals who receive them in terms of payment amount and duration has led many researchers to investigate the effects of unemployment insurance on the economy and the labor market. In this study, a data set of 6,644,110 people (benefit recipients and non-recipients) from 2014–2019 was analyzed using administrative records obtained from İŞKUR. However, data for 2018 and 2019 were excluded from the analysis because of COVID-19. The duration of job search, the probability of find a job, wage levels in the jobs they entered and the probability of remaining in employment of the individuals in the data set were examined using the sharp regression discontinuity analysis method. According to the regression discontinuity analysis based on the cutoff of 600 premium day in the last three years, the job search duration of those receiving unemployment benefits is 123.3 days (165.9 in women, 85.5 in men) longer and their probability of finding a job is 3.48% (4.6% in women, 1.5% in men) lower compared to non-recipients. In contrast, the wage levels of benefit recipients in the post-unemployment jobs are 10.9 points (9.3 in women, 11.9 in men) higher relative to the minimum wage, and their probability of remaining employed is 85.6% higher (86.5% in women, 84.9% in men). Numerous factors, such as age, gender, education, and unemployment insurance, influence job seekers' job search process. Beyond these factors, the working conditions of jobs in the labor market (such as job permanence, work intensity, exposure to occupational health and safety risks, quality of working time, and social security etc.) also influence job seekers' decision to accept a job. The findings indicate that unemployment benefits increase the duration of job searches and slightly reduce the likelihood of finding a job. On the other hand, unemployment benefits show that they provide the opportunity to be employed in longer-term jobsand higher earning in the labour market.