The effects of different unemployment insurance sanctions

Abstract

"Sanctions are an important instrument used by the Swiss unemployment insurance (UI) to enforce jobseekers' obligations. Unfulfilled or insufficiently fulfilled obligations can be sanctioned with up to 60 days of employment, whereby light sanctions (up to 15 days of employment) dominate in practice. This study comprehensively examines the use and effects of the various UI sanctions based on data from 2009 to 2022. The study distinguishes between different types, severity and timing of sanctions and looks at a broad set of outcome variables. In a first step, the study uses descriptive analyses to present an overview of the use of different sanctions in Switzerland. This is guided by the question: Who is sanctioned for what, when and how often? In the next sections, impact analyses are carried out. The effects of the various sanctions on rapid reintegration and on indicators of employment history up to three years after unemployment are examined. In addition, the effects of sanctions on search effort (applications) and search activity, based on data from the online platform Job-Room, have been analysed for the first time in this context. The results of the descriptive analysis show that around a third of all unemployment spells are sanctioned at least once. This is a remarkably high proportion, particularly in international comparison. On average, sanctioned jobseekers are younger, more often male and less likely to have a tertiary education than non-sanctioned persons. Non-compliant behaviour prior to unemployment (insufficient job search, self-inflicted unemployment) account for a large proportion of the sanctions imposed. The general picture is that sanctions tend to be imposed early, especially for minor offenses and those that occurred before the entry into registered unemployment. The analysis of the effects on rapid reintegration shows that, on average, sanctions have a positive effect on exits from unemployment into employment: The expected duration of unemployment is reduced by an average of 6.5 days, and by a bit more than 15 days in the case of light sanctions (which are clearly the most common, more than 70% of all sanctions). In the case of severe sanctions and those for self-inflicted unemployment, a negative effect is measured, i.e. a longer duration of unemployment. For almost all sanction types and severities, sanctions increase the transition rates into non-employment. If we look at the effects on sustainable reintegration, we see that sanctions have a slightly negative impact on employment stability and earned income after leaving unemployment. However, the negative effect weakens significantly beyond one year after leaving unemployment, but it is still visible after three years. People who were sanctioned with a cut of a larger amount of benefit days during their unemployment spell, experience significantly stronger negative effects on the employment career after unemployment. It is also worth noting that sanctions for offenses prior to unemployment hardly have any negative impact on the subsequent employment path, whereas the sanctions during unemployment have significant negative effects that decrease over time. The results of the evaluation of the application data and the click data from Job-Room are also remarkable: there are substantial effects on individual search intensity. These are primarily reflected in an increased number of applications submitted. After a sanction, the application target is also permanently increased (by the caseworker)." (Author's abstract, IAB-Doku) ((en))

Cite article

Arni, P., Kaiser, B., Lalive, R., Kläui, J. & Wolf, M. (2025): Wirkung unterschiedlicher Sanktionen der Arbeitslosenversicherung. (Grundlagen für die Wirtschaftspolitik / Staatssekretariat für Wirtschaft SECO 57), Bern, 104 p.