average rather than the true effect of either high or low benefits. Then, in order to capture any potential differences across regimes, we include two different variables the duration of high and low replacement periods (column I1l). Surprisingly, the coefficients of both variables are very similar in size; that is, one extra month of high replacement unemployment insurance has the same effect on unemployment duration as one more month of low replacement unemployment insurance (namely, a 15 percent increase in duration).

84. Yet these results are subject to an important criticism: they do not capture behavioral differences associated with actually receiving or not receiving unemployment insurance, but rather differences associated with ever receiving or never receiving unemployment insurance. This second comparison is not fully satisfactory since, once unemployment insurance is over, those who were entitled to benefits find themselves in the same situation as those who never received them. To address this issue, we follow the procedure described above and create a series of pseudo spells so that the indicators for unemployment insurance recipiency, and for high/low replacement ratios are allowed to vary over time - i.e. to be turned on and off, so to speak, as individuals move across the different regimes.

85. These new results not only strengthen our previous conclusions, but also provide new evidence on how the behavior of those who receive unemployment insurance varies over time (columns IV and V). The effect of unemployment insurance recipiency on unemployment duration is even more evident than before, with those who are actually receiving the benefits spending almost 50 percent more time unemployed than those who never received any payments. More interestingly, because this methodology allows us to capture changes in the behavior of unemployment insurance recipients, **we** can now see that, once unemployment insurance is over, those entitled to unemployment insurance leave the Registry at much faster rate than those who never received any benefits. This result confirms the basic intuition arising from Table XI and discussed above.

86. In addition, there is now a clear difference between those who receive high replacement unemployment insurance and those who receive low replacement unemployment insurance, with the former exhibiting lower exit probabilities (and, hence, longer unemployment duration). In particular, while unemployment duration is almost 50 percent longer for those receiving high level benefits than for those with no benefits, this percentage falls to 25 percent when the quantity of the benefits decreases. Furthermore, once unemployment insurance payments end, those entitled tend to exit the Registry at a higher rate than those who have not.

87. We already mentioned in Section E that not all individuals in the Unemployment Registry can be considered unemployed according to ILO standards. In fact, it is very likely that some of them are only registered for the purpose of receiving unemployment insurance and/or social assistance/support, and never had the intention of actually looking for a job or becoming employed. These individuals would be ready to abandon the Registry once their benefits are over, and if they represent a large share of the sample, their behavior may be driving some of our results. In order to check for this, we re-estimate the models described above using the Labor Force Survey, and including in the sample only those workers who are truly unemployed (i.e. searching for a job and available to start work).

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