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Heterogeneous impacts on layoffs of changes in Brazilian unemployment insurance eligibility rules

Tulio Cravo, Christopher O'Leary, Ana Cristina Sierra and Leandro Justino Veloso
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Tulio Cravo: African Development Bank
Ana Cristina Sierra: Inter-American Bank
Leandro Justino Veloso: Inter-American Bank

No 20-318, Upjohn Working Papers from W.E. Upjohn Institute for Employment Research

Abstract: This paper is based on the first use of program administrative data from Brazil’s unemployment insurance (UI) program to assess the impact of changes in UI eligibility criteria on layoff probabilities. We exploit exogenous program changes introduced by executive and legislative changes in 2015 to estimate impacts while accounting for the number of prior UI benefit requests. We estimate that changes in UI eligibility criteria had heterogeneous impacts distinguished by the number of prior benefit requests. We show that the 2015 changes in UI eligibility rules reduced layoffs and find evidence that the changes reduced collusion between workers and employers for layoffs because it became harder to extract subsidies from the UI system. The layoff reductions were greatest before workers' second benefit request.

Keywords: unemployment insurance; labor supply; labor legislation; worker turnover (search for similar items in EconPapers)
JEL-codes: J21 J22 J46 J65 J68 K31 (search for similar items in EconPapers)
Date: 2020-01
New Economics Papers: this item is included in nep-ias and nep-ore
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