Labor Market Policies in a Dual Economy

Esteban‐Pretel, Julen; Kitao, Sagiri

doi:10.1016/j.labeco.2020.101956

Cited by 8 publications

(2 citation statements)

References 36 publications

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“…Our work is also related to the analysis of labor market policies in a dual economy by Esteban-Pretel and Kitao (2020). While we focus on the details of a UISA system's design in partial equilibrium, they analyze much simpler policies but in a general equilibrium model.…”

Section: Related Literaturementioning

confidence: 99%

Designing unemployment insurance for developing countries

Cirelli

Espino

Sánchez³

2021

Journal of Development Economics

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The high incidence of informality in the labor markets of middle-income economies challenges the provision of unemployment protection. We show that, despite informational frictions, the introduction of an unemployment insurance savings account (UISA) system may provide substantial benefits. This system improves welfare by providing insurance to the unemployed and creating incentives to work in the formal sector. The optimal scheme generates a reduction in unemployment (from 4 to 3 percent), an increase in formality (from 68 to 72 percent) and a rise in total output (by 4 percent). Overall, individuals obtain welfare gains equivalent to a 2.4 percent increase in consumption in every period.

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Section: Related Literaturementioning

confidence: 99%

Designing unemployment insurance for developing countries

Cirelli

Espino

Sánchez³

2021

Journal of Development Economics

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“…The informal sector has some characteristics such as lack of compliance in paying taxes (Esteban-Pretel & Kitao, 2021), inefficient resources allocation (Hsieh & Klenow, 2009) and difficulty in getting finance from formal sources and government programs (Rothenberg et al, 2016). This sector is considered vulnerable since the workers have no social safety net and have a higher risk of crisis (Narula, 2020).…”

Section: Introductionmentioning

confidence: 99%

Return To Education In The Informal Sector In Indonesia

Hutapea

2022

SLJIL

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As developing countries with large population, Indonesia face challenges in managing its human capital to support the development. The government has allocated significant amount of money in educational sector to improve the education in Indonesia that will lead to increase in Indonesian capability and competitiveness in the labour market. However, labour market in Indonesia is still dominated by the informal workers which characterized with low educated and low earning jobs. This paper aims to explore whether education bring private return to the informal workers by applying the Mincer human capital earning function and exploring the returns between gender and areas (rural or urban). The results show that education bring positive impact to the worker's earning although the return is smaller in the informal sector than the informal one.

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Severance savings accounts and life-cycle savings

Azevedo,

Bettoni,

Santos

2024

Econ Theory

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Severance savings accounts (SSA) is an important government program aimed at protecting laid-off workers and stimulating savings. We analyze the distributive and aggregate effects of SSA in a rich life-cycle model with heterogeneous agents and incomplete markets. The model is estimated to be consistent with micro and macro data from Brazil. Our analysis reveals that, despite a decrease in voluntary savings, the policy expands aggregate savings, output, and wages, leading to long-run welfare gains. We show that although better risk sharing is important for our findings, the bulk of the gains come from improved efficiency as labor productivity increases and labor supply is reallocated towards highly educated workers and the early stages of the life cycle where agents are generally poorer and leisure is less valued. Interestingly, most of the gains we find accrue to less educated agents as the distribution of this group is skewed towards the informal sector, and they do not directly incur the additional burden from the increase in contributions. We also explore an alternative policy design in which households are allowed to access their severance savings accounts only after retirement, as in a defined contribution pension system. We find that despite greater uncertainty in medical costs later in life, households prefer a more flexible system that provides access to the SSA fund during working-age and after retirement.

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Labor Market Policies in a Dual Economy

Cited by 8 publications

References 36 publications

Designing unemployment insurance for developing countries

Designing unemployment insurance for developing countries

Return To Education In The Informal Sector In Indonesia

Severance savings accounts and life-cycle savings

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