IDEAS home Printed from https://ideas.repec.org/p/dbl/dblwop/1103.html
   My bibliography  Save this paper

Informality and Productivity: The Role of Unemployment Insurance Schemes

Author

Listed:
  • Cirelli, Fernando
  • Espino, Emilio
  • Sanchez, Juan M.

Abstract

We study the design of optimal unemployment protection schemes to evaluate its impact on labor markets, welfare and productivity. We consider a life-cycle economies with formal and informal labor markets, unobservable effort to find and keep formal jobs, and unobservable heterogeneities across worker to find better formal jobs. We analyze the first best allocation to compare with the allocations stemming from the implementation of two alternative schemes: (i) a simple unemployment insurance system with a defined profile of unemployment benefits; (ii) an unemployment insurance saving account scheme parameterized by a replacement rate, an initial contribution to the saving account, a minimum level of savings at which the payment is suspended, and a maximum level of savings at which the contributions are suspended. Our quantitative analysis makes clear that both schemes can have a significant impact on welfare and productivity. Two additional lessons can be learned. First, no scheme is necessarily better in both economies. Second, a reform that implements an scheme that it is welfare improving does not necessarily boost productivity and viceversa.

Suggested Citation

  • Cirelli, Fernando & Espino, Emilio & Sanchez, Juan M., 2017. "Informality and Productivity: The Role of Unemployment Insurance Schemes," Research Department working papers 1103, CAF Development Bank Of Latinamerica.
  • Handle: RePEc:dbl:dblwop:1103
    as

    Download full text from publisher

    File URL: https://scioteca.caf.com/handle/123456789/1103
    Download Restriction: Open Access

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Economía; Investigación socioeconómica; Trabajo y protección social; Desempleo;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dbl:dblwop:1103. 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: (Pablo Rolando). General contact details of provider: http://edirc.repec.org/data/cafffve.html .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.