How to improve the re-employment prospects of displaced workers remains a central policy challenge. In 2005, Finland introduced a voluntary Re-employment Program that combined early counseling and participation in labor market training with financial incentives. Enrollees with at least three years of prior work history met with a caseworker at the beginning of their unemployment spell, drafted an employment plan, and became entitled to higher benefits for four weeks as well as during individually targeted training programs. Using a difference-in-differences approach and rich administrative data, we find that the program substantially increased caseworker meetings and modestly participation in training, particularly among men, older workers, and the low-skilled. However, we find no evidence of reduced unemployment duration in the short run or improved employment outcomes in the longer run, either overall or within subgroups. These findings suggest that financial incentives for training and early counseling may not be sufficient to enhance re-employment prospects of displaced workers.
Many countries extend unemployment insurance (UI) entitlements for older workers. These extensions have been found to increase job separations and prolong unemployment durations among eligible workers, but little is known about how these policies affect younger workers. This paper studies whether extended UI reshapes the allocation of layoffs across age groups within firms using cohort-based reforms to the Finnish UI extension program. Exploiting reform-induced variation in eligibility across firms with different age structures, I find that a higher share of eligible coworkers significantly reduces the layoff risk of younger workers. Extended UI primarily reallocates separations across age groups rather than increases total layoffs. These findings highlight the importance of within-firm spillovers for understanding the aggregate employment and incidence effects of social insurance policies.