A spike at benefit exhaustion: Still possible after four years of unemployment

European policymakers wonder whether the long-term unemployed can still find jobs if the benefit period is shortened. We investigate this question by analysing how long-term unemployed react to the threat of running out of unemployment insurance (UI) after receiving it for almost four years. The empirical analysis is based on very precise administrative records of men’s unemployment spells. To identify the effect of UI exhaustion, we exploit a legislative change in the duration of benefits that progressively reduced UI entitlement from five to four years. Our results show a spike 3-6 months before benefit exhaustion for long-term unemployed.