Incentive effects of unemployment insurance savings accounts: Evidence from Chile

Gonzalo Reyes Hartley, Jan C. van Ours and Milan Vodopivec

Labour Economics, 2011, vol. 18, issue 6, 798-809

Abstract: The paper, the first one to empirically examine whether individual accounts internalize the cost of unemployment, estimates the determinants of job finding rates of unemployment benefit recipients under the Chilean program. This is a unique, innovative program that combines social insurance, provided via solidarity funding, with self-insurance in the form of unemployment insurance savings accounts (UISAs). The paper shows that beneficiaries who use solidarity funding are less likely to exit unemployment in early months than those relying on UISAs only. Moreover, job finding rates are found to be positively correlated with pre-separation UISA balances among those that use solidarity funding, but are found to be uncorrelated with balances for those relying on UISAs only. While the findings are consistent with the effects expected under the internalization of unemployment costs via UISAs, they do not pinpoint unambiguously the causal link, as alternative mechanisms may be responsible for the observed correlations, particularly selection into the use of UISAs.

Keywords: Unemployment insurance; Unemployment duration; Savings accounts (search for similar items in EconPapers)
JEL-codes: C41 H55 J64 J65 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Related works:
Working Paper: Incentive Effects of Unemployment Insurance Savings Accounts: Evidence from Chile (2010)
Working Paper: Incentive Effects of Unemployment Insurance Savings Accounts: Evidence from Chile (2010)
Working Paper: Incentive Effects of Unemployment Insurance Savings Accounts: Evidence from Chile (2010)
Working Paper: Incentive Effects of Unemployment Insurance Savings Accounts: Evidence from Chile (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:18:y:2011:i:6:p:798-809

DOI: 10.1016/j.labeco.2011.06.011

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