RT Journal Article
SR Electronic
T1 The welfare effects of unemployment insurance in Argentina
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 0622-12372R1
DO 10.3368/jhr.0622-12372R1
A1 González-Rozada, Martín
A1 Ruffo, Hernán
YR 2023
UL http://jhr.uwpress.org/content/early/2023/08/02/jhr.0622-12372R1.abstract
AB 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.