The Employment Effects of Lump-Sum and Contingent Job Insurance Policies: Evidence from Brazil

2020 ◽  
pp. 1-45
Author(s):  
Diogo G. C. Britto
Keyword(s):  
Labor Market ◽  
Unemployment Insurance ◽  
Informal Employment ◽  
Job Displacement ◽  
Severance Pay ◽  
Employment Effects ◽  
Insurance Policies ◽  
Lump Sum ◽  
Formal Employment ◽  
The Impact

Lump-sum job displacement policies (e.g. severance pay) are often presented as a better alternative to contingent policies (e.g. unemployment insurance) in the context of developing countries, under the rationale that the former are less harmful to formal employment as they do not incentivize substitution from formal to informal jobs. First, this paper provides original evidence on the employment effects of lump-sum income in the context of a developing country with high labor informality. Using Brazilian data, a regression discontinuity (RD) design shows that a transfer equivalent to 15 days of earnings (i) increases the duration out of a formal job by 1.9 weeks, (ii) reduces monthly earnings in the next job by 1.6%, and (iii) reduces total earnings in the formal labor market by 3.6% over a three-year period. Second, the paper studies the impact of a one-month extension in unemployment insurance (UI) on a comparable sample of displaced workers. UI is shown to have a stronger impact on the duration out of a formal job compared with a lump-sum transfer. In addition, a novel exercise matching administrative and survey data shows that 57% of the decrease in formal employment caused by UI is compensated by an increase in the incidence of informal employment. However, workers receiving the UI extension partially recover the initial employment loss over time in such a way that the adverse impact on employment over a three-year period is similar compared with the lump-sum transfer. Moreover, UI is found to be less harmful to re-employment wages, possibly because it improves the worker's bargaining power as it offers insurance against the duration of joblessness. Overall, the UI extension is less detrimental to total earnings in the formal labor market over a three-year period. Hence, although these findings indicate that contingent job insurance policies have a stronger impact on the initial duration out of a formal job and indeed incentivize informal employment, they do not support the notion that lump-sum policies are less harmful to formal employment and earnings in the medium term.

Protocol: Realist synthesis of the impact of unemployment insurance policies on poverty and health

2015 ◽  
Vol 48 ◽  
pp. 1-9 ◽  
Author(s):  
Agnes Molnar ◽  
Patricia O’Campo ◽  
Edwin Ng ◽  
Christiane Mitchell ◽  
Carles Muntaner ◽  
...  
Keyword(s):  
Unemployment Insurance ◽  
Realist Synthesis ◽  
Insurance Policies ◽  
Poverty And Health ◽  
The Impact

Gambling with the State: Land Titles and Personhood Rights among the Urban Poor in Indonesia

2015 ◽  
Vol 2 (2) ◽  
pp. 285-300 ◽  
Author(s):  
Lilis MULYANI
Keyword(s):  
Health Care ◽  
Social Security ◽  
Land Tenure ◽  
Urban Poor ◽  
The State ◽  
Informal Employment ◽  
Land Titling ◽  
Formal Employment ◽  
Land Titles ◽  
The Impact

AbstractDue to the pressures of urbanization, the urban poor often find themselves trapped in illegal settlements and informal employment. As housing is not affordable and formal employment is inaccessible to them because of their lack of education and skills, they live a precarious existence with insecure land tenure and employment. Discriminated against by the state on the grounds of their illegal status, the urban poor are unable to establish their identity and personhood rights as urban citizens, and so cannot access basic rights such as health care and social security. This article is based on fieldwork in Surakarta in Indonesia which studied the impact of a land-titling programme in an area previously characterized by informal tenure. It finds that the legitimation provided by land titles had a significant impact upon the lives of the residents, enabling them to access other personhood rights.

A Context-Robust Measure of the Disincentive Cost of Unemployment Insurance

2017 ◽  
Vol 107 (5) ◽  
pp. 343-348 ◽  
Author(s):  
Johannes F. Schmieder ◽  
Till von Wachter
Keyword(s):  
Labor Market ◽  
Labor Supply ◽  
Unemployment Insurance ◽  
Employment Effects ◽  
Different Types

This paper proposes a new measure of the disincentive cost of unemployment insurance (UI): the ratio of the behavioral cost (BC) to the mechanical cost (MC) of a UI reform. This measure represents the labor supply distortion relative to the additional (mechanical) transfer from the UI reform. We show the BC/MC ratio naturally arises from a model of optimal UI and can be readily computed and compared across different types of reforms and labor market contexts. We summarize the evidence regarding the BC/MC ratio for existing studies and relate it to typical measures of employment effects of UI.

scholarly journals Job Displacement Insurance and (the Lack of) Consumption-Smoothing

2021 ◽  
Vol 111 (3) ◽  
pp. 899-942
Author(s):  
François Gerard ◽  
Joana Naritomi
Keyword(s):  
High Sensitivity ◽  
Consumption Smoothing ◽  
Job Displacement ◽  
Severance Pay ◽  
Lump Sum ◽  
Transitory Income ◽  
Income Shock ◽  
Sources Of Variation ◽  
Employment Data

We study the spending profile of workers who experience both a positive transitory income shock (lump-sum severance pay) and a negative permanent income shock (layoff). Using de-identified expenditure and employment data from Brazil, we show that workers increase spending at layoff by 35 percent despite experiencing a 14 percent long-term loss. We find high sensitivity of spending to cash-on-hand across consumption categories and for several sources of variation, including predictable income drops. A model with present-biased workers can rationalize our findings, and highlights the importance of the timing of benefit disbursement for the consumption-smoothing gains of job displacement insurance policies. (JEL D12, G51, J65, J63, O12)

scholarly journals The Impact of Economic Shocks on Workers' Labor Market Outcomes

2021 ◽  
Author(s):  
◽  
Hannah Illing
Keyword(s):  
Labor Market ◽  
Labor Supply ◽  
Labor Market Outcomes ◽  
Job Displacement ◽  
Market Impact ◽  
Economic Shocks ◽  
Market Outcomes ◽  
Cross Border ◽  
Supply Shock ◽  
The Impact

In this dissertation, I analyze the effect of economic shocks on workers' labor market outcomes. In the first part of this thesis (Chapter 2), I investigate a labor supply shock in the form of cross-border migration. Chapters 3 and 4 in the second part of this thesis focus on the labor market impact of job displacement, resulting from a mass layoff, on individual workers’ careers.

Employment and the Functioning of the Labor Market

2018 ◽  
Author(s):  
Mongi Boughzala
Keyword(s):  
Labor Market ◽  
Law Enforcement ◽  
Supply And Demand ◽  
Market Performance ◽  
Informal Employment ◽  
National Statistics ◽  
Formal Employment ◽  
Main Factors ◽  
Hiring And Firing ◽  
The Cost

The focus of this chapter is on Tunisia’s labor and education institutions and regulations, and their impact on market performance. The chapter examines how the regulations affect the cost of formal employment, including the ease of hiring and firing, and the mismatch between supply and demand of educated labor. In Tunisia, larger firms create most of the formal employment, but are not growing fast enough, while informal employment is widespread partly because of inappropriate regulations that increase the cost of formal employment. This chapter argues that the high cost of formality, and weak law enforcement, are the main factors that accelerate the growth of informal employment and that the greater the level of informal employment, the longer it takes to fight unemployment. The analysis comprises an important institutional component and relies on the data provided by the TLMPS 2014 and other sources, mainly the National Statistics Institute (INS).

scholarly journals Depressive Symptoms among Chinese Informal Employees in the Digital Era

2021 ◽  
Vol 18 (10) ◽  
pp. 5211
Author(s):  
Yang Cai ◽  
Weiwei Kong ◽  
Yongsheng Lian ◽  
Xiangxin Jin
Keyword(s):  
Mental Health ◽  
Labor Market ◽  
Depressive Symptoms ◽  
Rapid Development ◽  
Informal Employment ◽  
Probit Regression ◽  
Cross Sectional ◽  
Data Set ◽  
Digital Era ◽  
The Impact

The mental health status of informal employees is rarely studied in China. Nowadays, new economic forms such as gig economy and platform economy are emerging with the rapid development of information and communication technology, which has brought great changes to the labor market, especially to the informal employment field. Thus, it is of great significance to investigate the depressive symptoms among informal employees in the digital era. Based on the cross-sectional data of CFPS (China Family Panel Studies, 2018), this study takes a quantitative analysis framework to explore and analyze the association between informal employment and depressive symptoms in the Chinese labor market. After screening, a data set of 8893 employees (60.5% male and 39.5% female) was established. Several statistical methods, including the Mann–Whitney test and probit regression model, were used in the sample data analysis. The results show that the prevalence of depressive symptoms among informal employees is significantly higher than that among formal employees. Depressive symptoms are highly related to informal work and other factors, such as education, physical health, household income, etc. The impact of Internet use on informal employees’ depressive symptoms is not significant. The mental health inequality between formal and informal employees still exists in the digital era, and corresponding labor market regulations and social policies should be perfected to address this issue.

Labor market under new social economic conditions

2021 ◽  
pp. 87-93
Author(s):  
N.A. Novruzov ◽  
Keyword(s):  
Labor Market ◽  
Social Economic ◽  
Digital Economy ◽  
Informal Employment ◽  
Economic Conditions ◽  
Existing Problems ◽  
Current Trends ◽  
The Impact

Shown is the transition of informal employment in the labor market to new socio-economic conditions, provided are appropriate recommendations on the use of new forms and occupations in the post-pandemic and digital economy, and identifyed are existing problems in that sphere. The aim of the study is to solve the following problems: to reveal the content of the transformation of the labor market into new conditions, analyze current trends in the digitalization of the economy, affecting the transformation of the labor market and forms of employment, analyze the impact of the pandemic on the labor market and the introduction of new forms of employment, identify risks and develop recommendations for the introduction of new forms of employment.

scholarly journals The Impact of the Informal Employment on the Social Security Deficits in Turkey

2015 ◽  
Vol 1 (1) ◽  
pp. 3 ◽  
Author(s):  
Adem Yavuz Elveren
Keyword(s):  
Labor Market ◽  
Social Security ◽  
Labor Force ◽  
Labor Force Participation ◽  
Informal Employment ◽  
Ageing Population ◽  
Female Labor ◽  
The Social ◽  
The Impact ◽  
Actuarial Model

This study examines the impact of the formalization of the labor market on social security deficits in Turkey. After a brief discussion on the causes and consequences of the informality of the economy, the paper reveals the effect of possible developments in the labor market, --such as the reduction in informal employment, the decrease in contribution evasion, and the increase in youth employment and womens employment-- on the deficits, which has increased since the early 1990s. To assess the effect, we utilize a simple actuarial model to project the deficit through 2050 under different scenarios. The results point to the importance of increasing female labor force participation, preventing evasion of social security contributions, and show the effect of an ageing population.

scholarly journals Informality, Gender Employment Gap, and COVID-19 in Mexico: Identifying Persistence and Dynamic Structural Effects

2021 ◽  
Vol 16 (3) ◽  
pp. 1-25
Author(s):  
Jorge O. Moreno ◽  
Cecilia Y. Cuellar
Keyword(s):  
Labor Market ◽  
Informal Sector ◽  
Structural Changes ◽  
Market Segment ◽  
Structural Effects ◽  
Urban Employment ◽  
Labor Market Dynamics ◽  
Formal Employment ◽  
Employment Gap ◽  
The Impact

The objective is to analyze the impact of the COVID-19 pandemic on the dynamics of the Mexican labor market (formal-informal employment) by gender. It is built consistent micro-founded time-series from 1987:Q1 to 2019:Q4 using the Mexican urban employment surveys and estimate a VAR model linking aggregate production and each market segment. Our results suggest significant adverse effects on formal employment resulting from the COVID-19 pandemic, with lengthy job recovery for females and males. The informal sector in both genders presents a lower forecasted response to the initial production shock but substantial observed employment losses, potentially linked to structural changes in the market. In the COVID-19 crisis, the informal sector is not a substitute for formal employment losses. The complexity of this crisis suggests crafting policies to improve the easiness of the market to enhance formal job recovery while promoting gender equality. Our main contribution is to estimate the diverse employment losses by segments and a critical structural change in the labor market dynamics resulting from the COVID-19 pandemic focusing on urban employment.

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