IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Unemployment Assistance and Transition to Employment in Argentina

  • Ana Iturriza
  • Arjun S. Bedi
  • Robert Sparrow

In 2001-2, Argentina experienced a wrenching economic crisis. Plan Jefes, implemented in May 2002, was Argentina's institutional response to the increase in unemployment and poverty triggered by the crisis. The program provided a safety net and appears to have 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 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 article examines the effect of participating in Plan Jefes on the probability of exiting unemployment. Regardless of the data set, the specification and the empirical approach, the article shows that Plan enrollees are at least 14 percentage points less likely to transit to employment as compared to individuals who applied but did not join the Plan. The effect of the program tends to be larger for females, and--over time--the program becomes increasingly feminized. Prima facie, the estimates suggest that programs such as Plan Jefes need to reconsider the balance between providing a safety net and dulling job-search incentives.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Access to the online full text or PDF requires a subscription.

File URL:
Download Restriction: Access to the online full text or PDF requires a subscription.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 59 (2011)
Issue (Month): 4 ()
Pages: 811 - 837

in new window

Handle: RePEc:ucp:ecdecc:doi:10.1086/660004
Contact details of provider: Web page:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Olivier Jean Blanchard & Peter Diamond, 1990. "Ranking, Unemployment Duration, and Wages," NBER Working Papers 3387, National Bureau of Economic Research, Inc.
  2. Sebastian Galiani & Hugo A. Hopenhayn, 2001. "Duration and Risk of Unemployment in Argentina," William Davidson Institute Working Papers Series 476, William Davidson Institute at the University of Michigan.
  3. Peter R. Fallon & Robert E. B. Lucas, 2002. "The Impact of Financial Crises on Labor Markets, Household Incomes, and Poverty: A Review of Evidence," World Bank Research Observer, World Bank Group, vol. 17(1), pages 21-45.
  4. Lawrence Katz & Bruce Meyer, 1988. "The Impact of the Potential Duration of Unemployment Benefits on the Duration of Unemployment," Working Papers 621, Princeton University, Department of Economics, Industrial Relations Section..
  5. McKenzie, David J., 2003. "How do Households Cope with Aggregate Shocks? Evidence from the Mexican Peso Crisis," World Development, Elsevier, vol. 31(7), pages 1179-1199, July.
  6. Holmlund, B., 1997. "Unemployment Insurance in Theory and Practice," CEPR Discussion Papers 380, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  7. James P. Smith & Duncan Thomas & Elizabeth Frankenberg & Kathleen Beegle, 2000. "Wages, Employment and Economic Shocks: Evidence from Indonesia," Working Papers 00-07, RAND Corporation Publications Department.
  8. Ana Corbacho & Mercedes Garcia-Escribano & Gabriela Inchauste, 2007. "Argentina: Macroeconomic Crisis and Household Vulnerability ," Review of Development Economics, Wiley Blackwell, vol. 11(1), pages 92-106, 02.
  9. Joshua D. Angrist, 1995. "Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants," NBER Working Papers 5192, National Bureau of Economic Research, Inc.
  10. David Card & Phillip B. Levine, 1998. "Extended Benefits and the Duration of UI Spells: Evidence from the New Jersey Extended Benefit Program," NBER Working Papers 6714, National Bureau of Economic Research, Inc.
  11. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-82, July.
  12. Carling, Kenneth & Holmlund, Bertil & Vejsiu, Altin, 1999. "Do Benefit Cuts Boost Job Findings? Swedish Evidence from the 1990s," Working Paper Series 1999:20, Uppsala University, Department of Economics.
  13. Guillermo Cruces & Quentin Wodon, 2007. "Risk-adjusted poverty in Argentina: measurement and determinants," Journal of Development Studies, Taylor & Francis Journals, vol. 43(7), pages 1189-1214.
  14. Federico Cerimedo, 2004. "Duración del Desempleo y Ciclo Económico en la Argentina," CEDLAS, Working Papers 0008, CEDLAS, Universidad Nacional de La Plata.
  15. Bruce Meyer, 2002. "Unemployment and workers' compensation programmes: rationale, design, labour supply and income support ," Fiscal Studies, Institute for Fiscal Studies, vol. 23(1), pages 1-49, March.
  16. Gyula Nagy & John Micklewright, 1998. "Unemployment assistance in Hungary," Empirical Economics, Springer, vol. 23(1/2), pages 155-175.
  17. Dale T. Mortensen, 1977. "Unemployment insurance and job search decisions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 30(4), pages 505-517, July.
  18. Galasso, Emanuela & Ravallion, Martin, 2003. "Social protection in a crisis - Argentina's Plan Jefes y Jefas," Policy Research Working Paper Series 3165, The World Bank.
  19. Martina Lubyova & Jan van Ours, 1998. "Work incentives and other effects of the transition to social assistance: Evidence from the Slovak Republic," Empirical Economics, Springer, vol. 23(1/2), pages 121-153.
  20. repec:fda:fdaddt:2006-08 is not listed on IDEAS
  21. Roed, Knut & Zhang, Tao, 2005. "Unemployment duration and economic incentives--a quasi random-assignment approach," European Economic Review, Elsevier, vol. 49(7), pages 1799-1825, October.
  22. Vella, F., 1989. "A Simple Estimator For Simultaneous Models With Censored Endogenous Regressors," RCER Working Papers 199, University of Rochester - Center for Economic Research (RCER).
  23. McKenzie, David J, 2004. "Aggregate Shocks and Urban Labor Market Responses: Evidence from Argentina's Financial Crisis," Economic Development and Cultural Change, University of Chicago Press, vol. 52(4), pages 719-58, July.
  24. van Ours, J.C. & van den Berg, G., 1997. "Eyeballing state dependence and unobserved heterogeneity in aggregate unemployment duration data," Other publications TiSEM 123b1d37-4898-4b05-a85b-2, Tilburg University, School of Economics and Management.
  25. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
  26. Stephen P. Jenkins & Carlos GarcÌa-Serrano, 2004. "The Relationship between Unemployment Benefits and Re-employment Probabilities: Evidence from Spain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(2), pages 239-260, 05.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ucp:ecdecc:doi:10.1086/660004. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.