Unemployment Insurance in High Informality Countries
Providing unemployment insurance is particularly problematic in countries with high informality because workers can claim unemployment benefits and work in the informal sector at the same time. This paper proposes a method to evaluate alternative schemes to provide insurance for unemployed individuals. First, it presents an economy that can be calibrated to reproduce key features of the economy for which the reform will be evaluated. Then, it shows how the implementation of an unemployment insurance savings account (UISA) scheme can be evaluated. The method is applied to Mexico, and the results show how the UISA scheme would eliminate incentives for participation in the informal sector. The implementation of the UISA would imply large welfare gains from the ex-ante perspective.
| Main Author: | |
|---|---|
| Other Authors: | |
| Format: | Working Papers biblioteca |
| Language: | English |
| Published: |
Inter-American Development Bank
|
| Subjects: | Workforce and Employment, Labor Policy, Informal Labor, Informal Economy, Unemployment Insurance, D82 - Asymmetric and Private Information • Mechanism Design, H55 - Social Security and Public Pensions, I38 - Government Policy • Provision and Effects of Welfare Programs, J65 - Unemployment Insurance • Severance Pay • Plant Closings, Unemployment, insurance, informality;Social Security;Labor Policy, |
| Online Access: | http://dx.doi.org/10.18235/0011475 https://publications.iadb.org/en/unemployment-insurance-high-informality-countries |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|