Unemployment Insurance in Chile: Does it Stabilize the Business Cycle?

Rodrigo Cerda and Rodrigo Vergara ()

No 302, Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile.

Abstract: We explore the stabilizing effects of unemployment insurance in Chile. A dynamic general equilibrium model is calibrated for the Chilean economy for the 1960-2000 period. We assume that the economy is subject to exogenous technological shocks and that a fraction of the population is liquidity constrained. Our main conclusion is that unemployment insurance has some stabilizing effect on the business cycle, especially on consumption, but that this effect is of the second order of magnitude. We also find that the larger the fraction of the population that is liquidity constrained, the more likely the program is welfare improving. Our results suggest that the objective of stabilizing the business cycle would be more efficiently achieved using alternative instruments.

Keywords: Unemployment insurance; business cycle (search for similar items in EconPapers)
JEL-codes: E32 J65 (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published as "Unemployment Insurance in Chile: Does it Stabilize the Business Cycle?", Journal of Policy Modeling, Vol. 99, N° 3, pp. 473-488, 2007.

Downloads: (external link)
https://www.economia.uc.cl/docs/doctra/dt-302.pdf (application/pdf)

Related works:
Journal Article: Unemployment insurance in Chile: Does it stabilize the business cycle? (2007)
Working Paper: Unemployment Insurance in Chile: Does it Stabilize the Business Cycle? (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ioe:doctra:302

Access Statistics for this paper

More papers in Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile. Contact information at EDIRC.
Bibliographic data for series maintained by Jaime Casassus ().