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Cessation of activity benefit of Spanish self-employed workers: a heterogeneous impact evaluation

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  • Moral-Arce, Ignacio
  • Martín-Román, Javier
  • Martín-Román, Ángel L.

Abstract

The goal of this paper is to evaluate the effects of a public policy implemented through the Spanish Social Security system: the Cessation of Activity Benefit (CAB) for self-employed workers. Making use of the Continuous Sample of Working Lives (MCVL) and by means of a Propensity Score Matching (PSM) methodology, our results show that, when we do not take into account heterogeneity in the treatment, self-employed workers receiving CAB experience non-employment spells between 22 and 33 logarithmic points longer than their not entitled counterparts. We also detect that this difference is not constant but depends on the likelihood of being treated. We believe that the two traditional problems that affect the insurance markets, consequence of the asymmetric information, adverse selection and moral hazard, are behind these results.

Suggested Citation

  • Moral-Arce, Ignacio & Martín-Román, Javier & Martín-Román, Ángel L., 2018. "Cessation of activity benefit of Spanish self-employed workers: a heterogeneous impact evaluation," MPRA Paper 85111, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:85111
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    Keywords

    Self-employment; Impact Evaluation; Propensity Score Matching; Opportunistic Behavior;

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • 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
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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