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Labour market policy is based on different instruments, some of which are easier to quantify and compare than others. The purpose of the cross-country survey presented in this paper is to improve the knowledge of one of these instruments, which are difficult to measure, namely the availability criteria that unemployed must fulfil in order to be entitled to unemployment benefits.
Because of their complexity, availability criteria can be difficult to compare between countries. Furthermore, availability criteria and their influences on the level of structural unemployment are seldom treated explicitly in the empirical literature on labour market policy. The criteria are, however, suggested to play an important role in relation to the structures of the labour market and hence the development and level of structural unemployment.
On this basis, the development of a useful indicator illustrating the strictness of availability criteria in labour market policies, which could serve as input in econometric studies, seems appropriate.
This paper presents the results and methods behind the calculation of an indicator of the strictness of availability criteria in selected OECD-countries.
Following this study, the basic idea has been to construct an indicator which could serve as input to a more extensive econometric study on determinants of the level of structural unemployment, including the indicator of availability and a variety of other structural factors. This empirical work is under preparation, but the preliminary results are promising to the extent that the availability indicator is significant and with the right sign, and it helps to explain variations in the structural unemployment level across countries.
The results presented here are based on a questionnaire send by the Danish Ministry of Finance to 19 different OECD-countries in the summer of 1997. The preliminary results of the survey were included in the Danish Medium Term Economic Survey, November 1997.
Countries were asked to give a description of the rules related to the availability of unemployed and to add whether actual implementation diverted extensively from the formal rules. Since availability rules are often applied with some degree of discretion, is has not been possible in all cases to clarify most common practices.
Moreover, the participating countries were asked whether the rules have been amended recently, but it has not been within the scope of this survey to analyse the development and changes of the criteria over time.
Despite these limitations, it is hoped that the survey will advance the know-ledge and understanding of legislation concerning availability criteria in other countries and hopefully provide inspiration for future policy design.
The survey includes other questions on the unemployment benefit system and active labour market policy. The responses on these questions confirm information gathered form other sources, but do not contribute with further knowledge.
The outline of this paper is as follows:
Section 2 gives a brief description of the role of availability criteria in labour market policies and hence the expected relations between the criteria and structures at the labour market. The method behind the calculation is described in section 3. Following, section 4 presents the indicator of the strictness of availability criteria in selected OECD-countries. Finally, section 5 presents some concluding remarks.