Unemployment Assistance and Transition to Employment in Argentina

Ana Iturriza, Arjun Bedi and Robert Sparrow ()
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Ana Iturriza: University of Palermo

No 3579, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In 2001-02, Argentina experienced a wrenching economic crisis. Plan Jefes, implemented in May 2002, was Argentina’s institutional response to the increase in unemployment and poverty triggered by the crisis. The program provided a social safety net and appears to have successfully protected some families against indigence. Despite this success, the continued existence of the program, which provides benefits to eligible unemployed individuals for an unlimited duration, may have unappealing long-term consequences. Reliance on the plan may reduce the incentive to search for work and in the long-run may damage individual employability and perpetuate poverty. Motivated by these concerns, this paper examines the effect of participating in Plan Jefes on the probability of exiting from unemployment. Regardless of the data set, the specification and the empirical approach, the evidence assembled in this paper shows that for the period under analysis individuals enrolled in the Plan are between 12 to 19 percentage points less likely to transit to employment as compared to individuals who applied but did not join the Plan. The negative effect of the program tends to be larger for females and as a consequence, over time, the program becomes increasingly feminized. Prima facie, the estimates suggest that programs such as Plan Jefes need to re-consider the balance between providing a social safety net and dulling job-search incentives.

Keywords: unemployment transitions; unemployment assistance programs; Argentina (search for similar items in EconPapers)
JEL-codes: J64 J65 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2008-07
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (4)

Published - published in: Economic Development and Cultural Change, 2011, 59 (4), 811-837

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Related works:
Journal Article: Unemployment Assistance and Transition to Employment in Argentina (2011)
Working Paper: Unemployment Assistance and Transition to Employment in Argentina (2009)
Working Paper: Unemployment Assistance and Transition to Employment in Argentina (2007)
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