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


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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

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