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Unintended Consequences of Unemployment Insurance: Evidence from Stricter Eligibility Criteria in Brazil

Cristiano C. Carvalho () and Renata Narita Raphael Corbi

No 2017_16, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: This paper investigates the impact of changes in the eligibility criteria of unemploy- ment benefits (UI) on layoffs in Brazil. We exploit exogenous variation introduced by a reform in the UI system in 2015. Our difference-in-differences estimates show that UI accounts for 11 − 13% of the average dismissal rates of eligible workers. Our results are consistent with workers having the incentive to strategically induce their dismissals in order to collect UI benefits.

Keywords: unemployment insurance; labor legislation; job turnover; layoffs (search for similar items in EconPapers)
JEL-codes: J63 J64 J65 J46 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ias
Date: 2017-10-23
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