Abstract

In most OECD countries a worker must complete a qualifying period within a statutory base period to be eligible for unemployment benefits. Economic research indicates that the amount and duration of unemployment benefits can affect unemploy ment. To analyze the effects of the qualifying period and the base period on the equilibrium rate of unemployment, we use a matching model with an endogenous separation rate to show that there is a trade-off between the eligibility parameters and the benefit parameters. A country that combines a high level of unemployment benefits with a long benefit duration can neutralize the effect on the unemployment rate with a long qualifying period and/or a short base period.