The Fiscal Costs of Unemployment Insurance

Joaquín Herrera (), Martin González-Rozada () and Hernan Ruffo ()

Department of Economics Working Papers from Universidad Torcuato Di Tella

Abstract: This paper studies the fiscal cost of unemployment insurance (UI). For that purpose, it surveys alternative methods used in the literature for estimating UI effects on government budget and compares them in a general setup. It then applies these methods using data from Argentina. Along with an estimate of the consumption drop upon unemployment, the paper evaluates the Marginal Value of Public Funds of UI and finds that, while results vary substantially depending on how fiscal externalities are considered, the value of UI tends to be positive and high.

Keywords: Unemployment Insurance; Impact evaluation; Welfare analysis. (search for similar items in EconPapers)
JEL-codes: C41 D61 I38 J65 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2025-05
New Economics Papers: this item is included in nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:udt:wpecon:2025_09

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