Unemployment benefit eligibility requirements and perceived time pressure

Abstract

AbstractObjectivesAn emerging body of literature links stressors or obstacles (e.g., compliance to an unemployment benefit eligibility requirement) to poor job search quality, questioning the effectiveness of such requirements in helping the unemployed to find employment. We investigate whether compliance to an unemployment benefit eligibility requirement affects an unemployed person's perception of time pressure, which theory relates to job search quality and which itself is hard to gauge.MethodsWe conduct a propensity‐score matching analysis, using data on the Australian “mutual obligations” program, matching otherwise similar unemployed persons with and without an unemployment benefit eligibility requirement.ResultsControlling for a wide range of confounders, we find a statistically significant positive effect of an unemployment benefit eligibility requirement on the affected person's perception of time pressure as theory predicts.ConclusionsOthers have hypothesized that poor labor market outcomes for those subjected to a “mutual obligations” requirement are a result of the requirement's adverse effect on job search quality. Our finding that compliance to unemployment benefit eligibility requirements increases an unemployed person's perceptions of time pressure aligns with that hypothesis.