A new study by Roope Uusitalo and Jouko Verho confirmed the well-known empirical facts regarding the unemployment and unemployment benefits - unemployment subsidies do not stimulate job search and re-employment but, instead, result in a growing length of unemployment duration.
In January 2003, unemployment insurance benefits in Finland were increased for workers with long employment track. On average, the benefit increased by 15 percent for the first 150 days of the spell. The outcome was a significant rise of duration period for those receiving high unemployment benefits. The authors find that the expected re-employment time increased by 31 days or about 11 percent.
Roope uusitalo, Jouko Verho: The effects of unemployment benefits on re-employment rates: Evidence from Finnish UI reform, Institute for Labor Market Policy Evaluation, Working Paper 2007:21 (link)