Cessation of Activity Benefit for Spanish Self-employed Workers: A Heterogeneous Impact Evaluation

• Ignacio Moral-Arce ^[1] ; Javier Martín-Román ^[2] ; Ángel L. Martín-Román ^[3]
  1. [1] Instituto de Estudios Fiscales

     Instituto de Estudios Fiscales

     Madrid, España

     
  2. [2] Universidad Nacional de Educación a Distancia

     Universidad Nacional de Educación a Distancia

     Madrid, España

     
  3. [3] Universidad de Valladolid

     Universidad de Valladolid

     Valladolid, España

     

  Mostrar afiliaciones +
• Localización: Hacienda Pública Española / Review of Public Economics, ISSN 0210-1173, Nº 231, 2019 (Ejemplar dedicado a: Impact Evaluation of Public Policies : 2019), págs. 41-79
• Idioma: inglés
• DOI: 10.7866/hpe-rpe.19.4.2
• Enlaces
  • Texto completo
• Resumen

  • The goal of this paper is to evaluate the effects of a public policy implemented through the Spanish Social Security system: the Cessation of Activity Benefit (CAB) for self-employed workers. Making use of the Continuous Sample of Working Lives (MCVL) and by means of a Propensity Score Matching (PSM) methodology, our results show that, when we do not take into account heterogeneity in the treatment, self-employed workers receiving CAB experience non-employment spells between 33 and 38 logarithmic points longer than their not entitled counterparts. We also detect that this difference is not constant but depends on the likelihood of being treated. We believe that the two traditional problems that affect the insurance markets, consequence of the asymmetric information, adverse selection and moral hazard, are behind these results.

• Referencias bibliográficas
  • Addison, J. T. and Portugal, P. (2008), “How do different entitlements to unemployment benefits affect the transitions from unemployment into...
  • Almeida, R. K. and Galasso, E. (2010), “Jump-starting self-employment? Evidence for welfare participants in Argentina”, World Development,...
  • Atkinson, A. B. and Micklewright, J. (1991), “Unemployment compensation and labor market transitions: a critical review”, Journal of Economic...
  • Bassanini, A. (2006), “Training, wages and employment security: an empirical analysis on European data”, Applied Economics Letters, 13(8):...
  • Baumgartner, H. J. and Caliendo, M. (2008), “Turning unemployment into self-employment: effectiveness of two start-up programmes”, Oxford...
  • Behrenz, L., Delander, L. and Månsson, J. (2016), “Is starting a business a sustainable way out of unemployment? Treatment effects of the...
  • Bennmarker, H., Carling, K. and Holmlund, B. (2007), “Do benefit hikes damage job finding? Evidence from Swedish unemployment insurance reforms”,...
  • Blanchflower, D. G. and Oswald, A. J. (1998), “What makes an entrepreneur?”, Journal of Labor Economics, 16(1): 26-60.
  • Bover, O. Arellano, M. and Bentolila, S. (2002), “Unemployment duration, benefit duration and the business cycle”, The Economic Journal, 112(479):...
  • Caliendo, M. (2009), “Start-up subsidies in East Germany: finally, a policy that works?”, International Journal of Manpower, 30(7): 625-647.
  • Caliendo, M. and Künn, S. (2011), “Start-up subsidies for the unemployed: long-term evidence and effect heterogeneity”, Journal of Public...
  • Caliendo, M. and Künn, S. (2014), “Regional effect heterogeneity of start-up subsidies for the unemployed”, Regional Studies, 48(6): 1108-1134.
  • Caliendo, M., Hogenacker, J., Künn, S. and Wießner, F. (2015), “Subsidized start-ups out of unemployment: a comparison to regular business...
  • Caliendo, M., Künn, S. and Weißenberger, M. (2016), “Personality traits and the evaluation of start-up subsidies”, European Economic Review,...
  • Caliendo, M., Tatsiramos, K. and Uhlendorff, A. (2013), “Benefit duration, unemployment duration and job match quality: a regression‐discontinuity...
  • Card, D. and Levine, P. B. (2000), “Extended benefits and the duration of UI spells: evidence from the New Jersey extended benefit program”,...
  • Card, D., Chetty, R. and Weber, A. (2007), “Cash-on-hand and competing models of intertemporal behavior: New evidence from the labor market”,...
  • Carling, K., Edin, P. A., Harkman, A. and Holmlund, B. (1996), “Unemployment duration, unemployment benefits, and labor market programs in...
  • Carling, K., Holmlund, B. and Vejsiu, A. (2001), “Do benefit cuts boost job finding? Swedish evidence from the 1990s”, Economic Journal, 111(474):...
  • Carmona, M., Congregado, E. and Golpe, A. A. (2012), “Comovement between self-employment and macroeconomic variables: evidence from Spain”,...
  • Centeno, M. and Novo, Á. A. (2006), “The impact of unemployment insurance on the job match quality: a quantile regression approach”, Empirical...
  • Centeno, M. and Novo, Á. A. (2009), “Reemployment wages and UI liquidity effect: a regression discontinuity approach”, Portuguese Economic...
  • Centeno, M. and Novo, Á. A. (2014), “Do Low-Wage Workers React Less to Longer Unemployment Benefits? Quasi-Experimental Evidence”, Oxford...
  • Congregado, E., Golpe, A. A. and Carmona, M. (2010), “Is it a good policy to promote self-employment for job creation? Evidence from Spain”,...
  • Congregado, E., Golpe, A. A. and Parker, S. C. (2012), “The dynamics of entrepreneurship: hysteresis, business cycles and government policy”,...
  • Cueto, B. and Mato, J. (2006), “An analysis of self-employment subsidies with duration models”, Applied Economics, 38(1): 23-32.
  • Cueto, B., Mayor, M. and Suárez, P. (2015), “Entrepreneurship and unemployment in Spain: a regional analysis”, Applied Economics Letters,...
  • Cueto, B., Mayor, M. and Suárez, P. (2017), “Evaluation of the Spanish flat rate for young self-employed workers”, Small Business Economics,...
  • Dawson, C. and Henley, A. (2012), “Something will turn up? Financial over-optimism and mortgage arrears”, Economics Letters, 117(1): 49-52.
  • Dawson, C., Henley, A. and Latreille, P. L. (2009), “Why do individuals choose self-employment?”, IZA Discussion Papers (No. 3974).
  • De Wit, G. and Van Winden, F. A. (1989), “An empirical analysis of self-employment in the Netherlands”, Small Business Economics, 1(4): 263-272.
  • Dennis, W. J. (1996), “Self-employment: When nothing else is available?”, Journal of Labor Research, 17(4): 645-661.
  • Fallick, B. C. (1991), “Unemployment insurance and the rate of re-employment of displaced workers”, Review of Economics and Statistics, 228-235.
  • Fondeville, N., Ozdemir, E., Lelkes, O., Ward, T. and Zolyomi, E. (2015), Recent changes in self-employment and entrepreneurship across the...
  • Ham, J. C. and Rea Jr, S. A. (1987), “Unemployment insurance and male unemployment duration in Canada”, Journal of Labor Economics, 5(3):...
  • Hammarstedt, M. (2006), “The predicted earnings differential and immigrant self-employment in Sweden”, Applied Economics, 38(6): 619-630.
  • Hammarstedt, M. and Shukur, G. (2009), “Testing the home-country self-employment hypothesis on immigrants in Sweden”, Applied Economics Letters,...
  • Heckman, J. J., Ichimura, H. and Todd, P. E. (1997), “Matching as an econometric evaluation estimator: Evidence from evaluating a job training...
  • Holmlund, B. (1998), “Unemployment insurance in theory and practice”, Scandinavian Journal of Economics, 100(1): 113-141.
  • Hunt, J. (1995), “The effect of unemployment compensation on unemployment duration in Germany”, Journal of Labor Economics, 13(1): 88-120.
  • Johansson, E. (2000), “Self-employment and liquidity constraints: evidence from Finland”, Scandinavian Journal of Economics, 102(1): 123-134.
  • Katz, L. F. and Meyer, B. D. (1990), “Unemployment insurance, recall expectations, and unemployment outcomes”, Quarterly Journal of Economics,...
  • Lalive, R. (2007), “Unemployment benefits, unemployment duration, and post-unemployment jobs: A regression discontinuity approach”, American...
  • Lalive, R. (2008), “How do extended benefits affect unemployment duration? A regression discontinuity approach”, Journal of Econometrics,...
  • Lalive, R., Van Ours, J. and Zweimüller, J. (2006), “How changes in financial incentives affect the duration of unemployment”, Review of Economic...
  • Layard, R. N. and Nickell, S. S. and Jackman, R. (1991), Unemployment: Macroeconomic performance and the labour market, New York: Oxford University...
  • Le Barbanchon, T. (2016), “The effect of the potential duration of unemployment benefits on unemployment exits to work and match quality in...
  • Lechner, M. (2002), “Program heterogeneity and propensity score matching: An application to the evaluation of active labor market policies”,...
  • López-Roldán, P. (2011), “La Muestra Continua de Vidas Laborales: posibilidades y limitaciones. Aplicación al estudio de la ocupación de la...
  • Martín-Román, A. L. and Moral, A. (2016), “Moral Hazard in Monday claim filing: evidence from Spanish sick leave insurance”, The BE Journal...
  • Martín-Román, Á. and Moral, A. (2017), “A methodological proposal to evaluate the cost of duration moral hazard in workplace accident insurance”,...
  • Meager, N., Bates, P. and Cowling, M. (2003), “An evaluation of business start-up support for young people”, National Institute Economic Review,...
  • Meyer, B. D. (1990), “Unemployment Insurance and Unemployment Spells”, Econometrica, 58(4): 757-782.
  • Michaelides, M. and Benus, J. (2012), “Are self-employment training programs effective? Evidence from project GATE”, Labour Economics, 19(5):...
  • Millán, J. M., Congregado, E. and Román, C. (2012), “Determinants of self-employment survival in Europe”, Small Business Economics, 38(2):...
  • Millán, J. M., Congregado, E. and Román, C. (2014), “Persistence in entrepreneurship and its implications for the European entrepreneurial...
  • Moral-Arce, I. (2016), “Opinión sobre la aplicación de la fórmula para calcular el tipo de cotización de la prestación por cese de actividad...
  • Muñoz-Bullón, F. and Cueto, B. (2011), “The sustainability of start-up firms among formerly wageemployed workers”, International Small Business...
  • Nickell, S. J. (1979), “The effect of unemployment and related benefits on the duration of unemployment”, Economic Journal, 89(353): 34-49.
  • Nickell, S. J. (1997), “Unemployment and labor market rigidities: Europe versus North America”, Journal of Economic Perspectives, 11(3): 55-74.
  • Parker, S. C., Congregado, E. and Golpe, A. A. (2012), “Testing for hysteresis in entrepreneurship”, in 23 OECD countries, Applied Economics...
  • Pedersen, P. J. and Westergård-Nielsen, N. C. (2000), “Unemployment. A review of the evidence from panel data”, in Economics of Unemployment....
  • Pérez, C. and Moral-Arce, I. (2015), Técnicas de Evaluación de Impacto. Editorial Garceta.
  • Persson, H. (2004), “The survival and growth of new establishments in Sweden, 1987-1995”, Small Business Economics, 23(5): 423-440.
  • Porras-Arena, M. S. and Martín-Román, Á. L. (2019), “Self-employment and the Okun’s Law”, Economic Modelling, 77: 253-265.
  • Rebollo-Sanz, Y. F. and García-Pérez, J. I. (2015), “Are unemployment benefits harmful to the stability of working careers? The case of Spain”,...
  • Rebollo-Sanz, Y. F. and Rodríguez-Planas, N. (2018), “When the Going Gets Tough… Financial Incentives, Duration of Unemployment and Job-Match...
  • Rees, H. and Shah, A. (1986), “An empirical analysis of self-employment in the UK”, Journal of Applied Econometrics, 1(1): 95-108.
  • Rodríguez-Planas, N. and Benus, J. (2010), “Evaluating active labor market programs in Romania”, Empirical Economics, 38(1): 65-84.
  • Røed, K. and Zhang, T. (2003), “Does unemployment compensation affect unemployment duration?”, Economic Journal, 113(484): 190-206.
  • Román, C., Congregado, E. and Millán, J. M. (2011), “Dependent self-employment as a way to evade employment protection legislation”, Small...
  • Román, C., Congregado, E. and Millán, J. M. (2013), “Start-up incentives: Entrepreneurship policy or active labour market programme?”, Journal...
  • Scarpetta, S. (1996), “Assessing the role of labour market policies and institutional settings on unemployment: A cross-country study”, OECD...
  • Schmieder, J. F., Von Wachter, T. and Bender, S. (2012), “The effects of extended unemployment insurance over the business cycle: Evidence...
  • Spasova S., Bouget D., Ghailani, D. and Vanhercke B. (2017), Access to social protection for people working on non-standard contracts and...
  • Storey, D. J. and Johnson, S. (1987), “Regional variations in entrepreneurship in the UK”, Scottish Journal of Political Economy, 34(2): 161-173.
  • Uusitalo, R. and Verho, J. (2010), “The effect of unemployment benefits on re-employment rates: Evidence from the Finnish unemployment insurance...
  • Van Ours, J. C. and Vodopivec, M. (2006), “How shortening the potential duration of unemployment benefits affects the duration of unemployment:...
  • Wießner, F., Evers, K. and Schleinkofer, M. (2016), “A Quantum of Solace-An Examination of the Voluntary Extended Unemployment Insurance for...
  • Winter-Ebmer, R. (1998), “Potential unemployment benefit duration and spell length: Lessons from a quasi-experiment in Austria”, Oxford Bulletin...