Details

Autor(en) / Beteiligte

• Gonzalez-Rozada, Martin
• Ruffo, Hernán

Titel

Optimal unemployment benefits in the presence of informal labor markets

Ist Teil von

• Labour economics, 2016-08, Vol.41, p.204-227

Ort / Verlag

Amsterdam: Elsevier B.V

Erscheinungsjahr

2016

Link zum Volltext

Quelle

Alma/SFX Local Collection

Beschreibungen/Notizen

• We assess optimal unemployment benefit level and duration in a labor market with many informal jobs. Using administrative data from Argentina, a country with high informality, we exploit discontinuities in duration, and a reform that increases benefits. We find that increasing benefits hardly extends unemployment spells but raises re-employment wages. In contrast, extending unemployment benefits prolongs unemployment spells with no effect on re-employment wages. In a search model, we derive sufficient statistics to analyze the welfare effects of a reform that increases benefits by shortening duration. Calibrating our formula using our empirical results, we find that welfare would increase with higher benefits and shorter duration. •We analyze the tradeoff between unemployment insurance (UI) level and duration.•We derive a sufficient statistics formula of the welfare gains of a balanced-budget UI reform.•Through administrative data from Argentina we evaluate the impact of changes in UI.•We conclude that welfare would rise if unemployment insurance was higher but shorter.