Setting time limits on unemployment benefits make the long-term unemployed five times more likely to find jobs

Rising unemployment and long-term unemployment have become increasing concerns for Europe’s policymakers since the onset of the financial crisis five years ago. One option for governments is to shorten the duration of unemployment benefits. Using evidence from Denmark, Stéphanie Vincent Lyk-Jensen and Cecilie Dohlmann Weatherall find that if benefits for the long-term unemployed are limited to four years instead of five years, then there is a significant spike in the likelihood that they will enter the workforce between three and six months before their benefits end.