Unemployment insurance, informality and precautionary savings

• Grant number: 21/11265-1
• Support Opportunities: Scholarships abroad - Research Internship - Doctorate (Direct)
• Effective date (Start): February 15, 2022
• Effective date (End): July 30, 2022
• Field of knowledge: Applied Social Sciences - Economics
• Principal Investigator: Marcelo Rodrigues dos Santos
• Grantee: Caio Romeu Cerqueira Bloise
• Supervisor: Ronald Wolthoff
• Host Institution: Instituto de Ensino e Pesquisa (Insper). São Paulo , SP, Brazil
• Research place: University of Toronto (U of T), Canada
• Associated to the scholarship: 20/00371-2 - Labor market effects of unemployment insurance with informality, BP.DD

Abstract

An important stylized fact about precautionary savings in a labor market characterized by formal and informal workers is that the former saves more compared to the latter. In this project, we build a searching and matching model that incorporates informality in an incomplete markets framework to see the role of Unemployment Insurance (UI) in such behavior. Thus, we add in our UI design the possibility of becoming eligible and exhaust the benet after some specic period. Moreover, based on empirical evidence, we add the possibility of worker to receive the benet while working in informality. Then, we intend to calibrate the model to be consistent with micro and macro evidence for Brazil. (AU)