How unemployment insurance savings accounts affect employment duration: evidence from Chile

Nagler P.
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Nagler P.: UNU-MERIT

No 2013-039, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: The introduction of unemployment insurance savings accounts UISA in Chile in October 2002 brought in more comprehensive unemployment protection while decreasing the opportunity costs of job change. Being the first to empirically investigate the effect of UISA on employment duration, this paper examines i whether the introduction of UISA affected employment duration among formal private sector workers, and ii the magnitude of this effect. The analysis is performed on longitudinal social protection data and uses survival analysis techniques, including non-parametric, semi-parametric and parametric analysis, and competing-risk models. The paper finds that workers participating in the scheme show an increased hazard ratio of leaving employment, or accelerated time to employment termination. The effect is larger for workers becoming unemployed or inactive compared to workers changing jobs. The results provide strong support that the introduction of UISA led to shorter employment duration andhigher mobility of the workforce in Chile.

Keywords: Duration Analysis; Optimal Timing Strategies; Labor Turnover; Vacancies; Layoffs; Unemployment; Duration; Incidence; Job Search; Unemployment Insurance; Severance Pay; Plant Closings (search for similar items in EconPapers)
JEL-codes: C41 J63 J64 J65 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-ias, nep-lab and nep-lam
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2013039

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