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Research ArticleArticles

The welfare effects of unemployment insurance in Argentina

New estimates using changes in the schedule of transfers

Martín González-Rozada and Hernán Ruffo
Published online before print August 11, 2023, 0622-12372R1; DOI: https://doi.org/10.3368/jhr.0622-12372R1
Martín González-Rozada
Martín González-Rozada is at Universidad Torcuato Di Tella.
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Hernán Ruffo
Hernán Ruffo ([email protected]) is at Universidad Torcuato Di Tella.
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Abstract

Unemployment insurance transfers should balance the provision of consumption to the unemployed with the disincentive effects on search. Developing countries face the additional challenge of workers hiding employment and income in informal jobs. By exploiting the kinks in the schedule of transfers in Argentina, we find that higher benefits moderately affect job-finding rates and significantly increase re-employment wages. Using a model with random wage offers, we derive a sufficient statistics formula and calibrate it with our estimates to show that welfare could rise substantially if benefits were increased in Argentina. Importantly, our conclusion is relevant for the median eligible worker.

Keywords:
  • Unemployment Insurance
  • Sufficient statistics
  • Regression kink design
  • Instrumental Variables
JEL Classification:
  • C41
  • I38
  • J65

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Journal of Human Resources: 60 (3)
Journal of Human Resources
Vol. 60, Issue 3
1 May 2025
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The welfare effects of unemployment insurance in Argentina
Martín González-Rozada, Hernán Ruffo
Journal of Human Resources Aug 2023, 0622-12372R1; DOI: 10.3368/jhr.0622-12372R1

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The welfare effects of unemployment insurance in Argentina
Martín González-Rozada, Hernán Ruffo
Journal of Human Resources Aug 2023, 0622-12372R1; DOI: 10.3368/jhr.0622-12372R1
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Keywords

  • Unemployment Insurance
  • sufficient statistics
  • Regression kink design
  • instrumental variables
  • C41
  • I38
  • J65
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