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Cessation of Activity Benefit for Spanish Self-employed Workers: A Heterogeneous Impact Evaluation

Ignacio Moral-Arce (), Javier Martín-Román () and Ángel Martín-Román ()
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Ignacio Moral-Arce: Instituto de Estudios Fiscales

Hacienda Pública Española / Review of Public Economics, 2019, vol. 231, issue 4, 41-79

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 Match-ing (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 33 and 38 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 prob-lems that affect the insurance markets, consequence of the asymmetric information, adverse selection and moral hazard, are behind these results.

Keywords: Self-employment; impact evaluation; propensity score matching; opportunistic Behavior (search for similar items in EconPapers)
JEL-codes: D04 J08 J64 J65 K31 (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:hpe:journl:y:2019:v:231:i:4:p:41-79