Unemployment Assistance and Transition to Employment in Argentina
AbstractIn 2001-02, Argentina experienced a wrenching economic crisis. Plan Jefes, implemented in May 2002, was Argentinas institutional response to the increase in unemployment and poverty triggered by the crisis. The program provided a social safety net and appears to have successfully protected some families against indigence. Despite this success, the continued existence of the program, which provides benefits to eligible unemployed individuals for an unlimited duration, may have unappealing long-term consequences. Reliance on the plan may reduce the incentive to search for work and in the long-run may damage individual employability and perpetuate poverty. Motivated by these concerns,this paper examines the effect of participating in Plan Jefes on the probability of exiting from unemployment. Regardless of the data set, the specification and the empirical approach, the paper shows that individuals enrolled in the Plan are between 12 to 19 percentage points less likely to transit to employment as compared to individuals who applied but did not join the Plan. The negative effect of the program tends to be larger for females and as a consequence, over time, the program becomes increasingly feminized. Prima facie, the estimates suggest that programs such as Plan Jefes need to re-consider the balance between providing a social safety net and dulling job-search incentives. --
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Bibliographic InfoPaper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 with number 1.
Date of creation: 2009
Date of revision:
Unemployment assistance programs; unemployment transitions; Argentina;
Other versions of this item:
- Ana Iturriza & Arjun S. Bedi & Robert Sparrow, 2011. "Unemployment Assistance and Transition to Employment in Argentina," Economic Development and Cultural Change, University of Chicago Press, vol. 59(4), pages 811 - 837.
- Iturriza, A. & Bedi, A.S. & Sparrow, R.A., 2007. "Unemployment assistance and transition to employment in Argentina," ISS Working Papers - General Series 18747, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
- Iturriza, Ana & Bedi, Arjun S. & Sparrow, Robert, 2008. "Unemployment Assistance and Transition to Employment in Argentina," IZA Discussion Papers 3579, Institute for the Study of Labor (IZA).
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
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