Unemployment Benefits and Labour Market in OECD and Russia

DOI: 10.20542/0131-2227-2019-63-12-32-41

N. Vishnevskaya (vishnev@hse.ru),
National Research University Higher School of Economics, 20, Myasnitskaya Str., Moscow, 101000, Russian Federation; 
A. Zudina (azudina@hse.ru),
National Research University Higher School of Economics, 20, Myasnitskaya Str., Moscow, 101000, Russian Federation

Acknowledgements. The article was prepared within the framework of the Basic Research Program of the National Research University Higher School of Economics (HSE) and supported within the framework of a subsidy by the Russian Academic Excellence Project “5-100”.

Abstract. The unemployment benefits system is one of the most important labour market institutions, smoothing the decline in consumption due to job loss and providing the unemployed with time for job search. However, the size of payments and their duration can also have a number of serious negative consequences for the labour market associated with the moral hazard and the quality of matching between workers and jobs. This paper presents a comparative analysis of the institutional features of unemployment benefits system in OECD countries, as well as the key directions of their influence on the labour market outcomes, which have compared with the main characteristics of the Russian system of support for the unemployed. Unemployment benefits system is among those labour market institutions that have particularly large cross-country differences. These differences have made up of three main components: the replacement rate, the duration of payment, and the assignment criteria. These characteristics determine the differences in the impact of benefits on the labour market, primarily on employment rate, the number of the unemployed, the duration of unemployment state, as well as on the job search process. Effective policy measures supporting the unemployed are impossible without taking into account the whole range of consequences, which include both positive and negative effects on employment rates, productivity and wages. Measures aimed at curbing the costs of the unemployment insurance fund, toughening the assignment criteria, establishing a closer connection between unemployment benefit receiver status, and the activity of searching for a new job should contribute to increasing efficiency of this labour market institution. However, changes in the unemployment benefits system cannot solve all the problems of the labour market. Short period of job search and strict criteria for granting benefits will make the need for reforms in the demand side of labour market – the quality of jobs as well as their number – increasingly important.

Keywords: unemployment, job loss, job search, moral hazard, Russia, OECD


1. Unemployment-benefit Coverage: Recent Trends and Their Drivers. OECD Employment Outlook. 2018, ch. 5, pp. 187-212. Available at: https://cdn.20m.es/adj/2018/07/04/3949.pdf (accessed 05.06.2019).

2. OECD Social Expenditure Database (SOCX). Available at: http://www.oecd.org/els/soc/expenditure.htm (accessed 05.06.2019).

3. Immervoll H., Richardson R. Redistribution Policy and Inequality Reduction in OECD Countries. What Has Changed in Two Decades? OECD Social, Employment and Migration Working Paper, 2011, no. 122. 97 .

4. OECD. The Future of Social Protection: what Works for Non-standard Workers? OECD, Paris, 2018. Available at: https://www.oecd.org/social/Future-of-social-protection.pdf (accessed 05.06.2019).

5. Back to Work: Lessons from Nine Country Case Studies of Policies to Assist Displaced Workers. OECD Employment Outlook, 2018, ch. 4, pp. 125-186. Available at: https://cdn.20m.es/adj/2018/07/04/3949.pdf (accessed 05.06.2019).

6. Fredriksson P., Holmlund B. Improving Incentives in Unemployment Insurance: a Review of Recent Research. Journal of Economic Surveys, 2006, vol. 20, no. 3, pp. 357-386.

7. Venn D. Eligibility Criteria for Unemployment Benefits: Quantitative Indicators for OECD and EU Countries. OECD Social, Employment and Migration, 2012, WP, no. 131. DOI:https://doi.org/10.1787/1815199X

8. Immervoll H., Scarpetta S. Activation and Employment Support Policies in OECD ountries. An Overview of Current Approaches. IZA Journal of Labor Policy, 2012, 1:9. Available at: http://www.izajolp.com/content/1/1/9 (accessed


9. Palme J., Nelson K., Sjoberg O., Minas R. European Social Models. Protection and Inclusion. Research Report, Institute for Future Studies, Stockholm, 2009. 106 p.

10. Esser I., Ferrarini T., Nelson K., Palme J., Sjoberg O. Unemployment Benefits in EU Member States. Employment. Social Affairs & Inclusion Report of the European Commission. European Union, 2013. 25 p.

11. Moffitt R.A. Unemployment Benefits and Unemployment. IZA World of Labor. 2014, no. 13. 10 p. DOI:https://doi.org/10.15185/izawol.13.

12. Lalive R., Zweimuller J. Benefit Entitlement and Unemployment Duration: Accounting for Policy Endogeneity. Journal of Public Economics, 2004, vol. 88, no. 12, pp. 2587-2616.

13. Lichter A. Benefit Duration and Job Search Effort: Evidence from a Natural Experiment. IZA Discussion Paper Series, 2016, no. 10264. 42 p.

14. Lalive R., van Ours J.C., Zweimuller J. How Changes in Financial Incentives Affect the Duration of Unemployment. Review of Economic Studies, 2006, vol. 73, no. 4, pp. 1009-1038.

15. Card D., Chetty R., Weber A. Cash-on-hand and Competing Models of Intertemporal Behavior: New Evidence from the Labor Market. Quarterly Journal of Economics, 2007, vol. 122, no. 4, pp. 1511-1560.

16. Katz J., Meyer B. The Impact of the Potential Duration of Unemployment Benefits on the Duration of Unemployment. Journal of Public Economics, 1990, vol. 41, no. 1, pp. 45-72.

17. Card D., Levine P. B. Extended Benefits and the Duration of UI spells: Evidence from the New Jersey Extended Benefit Program. Journal of Public Economics, 2000, vol. 78, iss. 1–2, pp. 107-138.

18. Van Ours J. C., Vodopivec M. How Shortening the Potential Duration of Unemployment Benefits Affects the Duration of Unemployment: Evidence from a Natural Experiment. Journal of Labor Economics, 2006, vol. 24, no 2, pp. 351-378.

19. Chetty R. Moral Hazard vs. Liquidity and Optimal Unemployment Insurance. Journal of Political Economy, 2008, vol. 116, no. 2, pp. 173-234.

20. Acemoglu D., Shimer R. Productivity Gains from Unemployment Insurance. European Economic Review, 2000, vol. 44, no. 7, pp. 1195-1224.

21. Tatsiramos K. Unemployment Insurance in Europe: Unemployment Duration and Subsequent Employment Stability. Journal of the European Economic Association, 2009, vol. 7, no. 6, . 1225-1260.

22. Rothstein J. Unemployment Insurance and Job Search in the Great Recession. Brookings Papers on Economic Activity, fall 2011, pp. 143-213.

23. Farber H., Valletta R. Do Extended Unemployment Benefits Lengthen Unemployment Spells? Evidence from Recent Cycles in the US Labor Market. Industrial Relations Section Working Paper, no. 573, April, 2013, Princeton, Princeton University. 43 p.

24. Burgess P., Kingston J. The Impact of UI Benefits on Reemployment Success. Industrial and Labor Relations Review, 1976, vol. 30, pp. 25-31.

25. Ehrenberg R., Oaxaca R. Unemployment Insurance, Duration of Unemployment, and Subsequent Wage Gain. American Economic Review, 1976, vol. 66, pp. 754-766.

26. Gangl M. Scar Effects of Unemployment: an Assessment of Institutional Complementarities. American Sociological Review, 2006, vol. 71, pp. 986-1013.

27. Mooi-Reci I. Retrenchments in Unemployment Insurance Benefits and Wage Inequality: Longitudinal Evidence from the Netherlands. 1985–2000. European Sociological Review, 2012, vol. 28, no. 5, pp. 594-606.

28. Van Ours J.C., Vodopivec M. Shortening the Potential Duration of Unemployment Benefits Does not Affect the Quality of Post-Unemployment Jobs: Evidence from a Natural Experiment. IZA Discussion Paper Series, 2006, no. 2171. 34 p.

29. Meghir C., Pistaferri L. Earnings. Consumption and Life Cycle Choices. Ashenfelter O., Card D., eds. Handbook of Labor Economics, 2011, vol. 4B, pp. 773-854.

30. Karter D., Bedar M., Peirong Bista S. Sravnitel’nyi analiz sistemy strakhovaniya po bezrabotitse i strakhovaniya zanyatykh lits v stranakh Azii i v mire [Comparative review of unemployment and employment insurance experiences in Asia and worldwide]. Moscow, ILO, 2014. 118 p.

31. Bingley P., Cappellari L., Westergard-Nielsen N. Unemployment Insurance. Wage Dynamics and Inequality over the Life Cycle. IZA Discussion Paper Series, 2013, no. 7128. 56 p.

32. Employment and Unemployment in Russian Federation in July 2018 (According to Labour Force Survey) FSSS, 2018 (In Russ.). Available at: http://www.gks.ru/bgd/free/b04_03/IssWWW.exe/Stg/d01/165.htm (accessed 05.06.2019).

33. Kapelyushnikov R.I. Obshchaya i registriruemaya bezrabotica: v chem prichiny razryva? [General and Registered Unemployment: what Are the Reasons for the Gap?] HSE, Series WP3 “Problems of the Labour Market”, 2002, no. 3. 48 p.

34. OECD Reviews of Labour Market and Social Policies: Russian Federation. Moscow, OECD, 2011, 220 p. (In Russ.) DOI: http://dx.doi.org/10.1787/9789264119345-ru

35. The size of the basic minimum social guarantees established by the Russian Federation legislation in relation to the subsistence minimum. Moscow, FSSS, 2018 (In Russ.) Available at: www.gks.ru/free_doc/new_site/population/urov/garan.htm (accessed 05.06.2019).

36. Russian Statistical Yearbook. Moscow, FSSS, 2017 (In Russ.) Available at: http://www.gks.ru/bgd/regl/b17_13/Main.htm (accessed 02.09.2019).

37. Gimpelson V., Sharunina A. Potoki na rossiiskom rynke truda: 2000– 2012 [Flows in the Russian Labor Market: 2000–2012]. Higher School of Economics Economic Journal, 2015, vol. 19, no. 3, pp. 313-348.

38. Zudina A. Dorogi, vedushchie molodezh’ v NEET: sluchai Rossii [The pathways that le youth in NEET: the case of Russia]. Higher School of Economics Economic Journal, 2018, vol. 22, no. 2, pp. 197-227.

Registered in System SCIENCE INDEX

For citation:
Vishnevskaya N., Zudina A. Unemployment Benefits and Labour Market in OECD and Russia. World Eonomy and International Relations, 2019, vol. 63, no. 12, pp. 32-41. https://doi.org/10.20542/0131-2227-2019-63-12-32-41

Comments (0)

No comments

Add comment






Dear authors! Please note that in the VAK List of peer-reviewed scientific journals, in which the main scientific results of dissertations for the degree of candidate and doctor of sciences should be published for the “MEMO Journal” the following specialties are recorded:
economic sciences:
5.2.5. World Economy.
5.2.1. Economic Theory
5.2.3. Regional and Branch Economics
political sciences:
5.5.4. International Relations
5.5.1. History and Theory of Politics
5.5.2. Political Institutions, Processes, Technologies


Current Issue
2024, vol. 68, No. 5
Topical Themes of the Issue:
  • Are There Any Ways to Break Through the Korean Nuclear Impasse?
  • Contemporary U.S. Taiwan Policy: Balancing on the Edge
  • The Gulf Monarchies’ Vision of the Global Order Transformations and the Russian Place in It
  • At Post-Soviet Space
Submit an Article
The Editorial Board invites authors to write analytical articles on the following topics:
  • changes in the processes of globalization in modern conditions
  • formation of the new world order
  • shifts in civilization at the stage of transition to a digital society

The editors are also interested in publishing synthesis articles / scientific reviews revealing the main trends in the development of certain regions of the world - Latin America, Africa, South Asia, etc.