|Title:||Unemployment Insurance as a Subsidy to Risky Firms||Authors:||Van Doornik, Bernardus
DIMAS MATEUS FAZIO
|Issue Date:||22-Jan-2022||Publisher:||Oxford University Press (OUP)||Citation:||Van Doornik, Bernardus, DIMAS MATEUS FAZIO, Schoenherr, David, Skrastins, Janis (2022-01-22). Unemployment Insurance as a Subsidy to Risky Firms. The Review of Financial Studies. ScholarBank@NUS Repository. https://doi.org/10.1093/rfs/hhac013||Abstract:||
We document that a more generous unemployment insurance (UI) system shifts labor supply from safer to riskier firms and reduces the compensating wage differentials that risky firms need to pay. Consequently, a more generous UI system increases risky firms’ value and fosters entrepreneurship by reducing new firms’ labor costs. Exploiting a UI reform in Brazil that affects only part of the workforce allows us to compare labor supply for workers with different degrees of UI protection within the same firm, sharpening the identification of the results. Altogether, our results suggest that UI provides a transfer system from safe to risky firms.
|Source Title:||The Review of Financial Studies||URI:||https://scholarbank.nus.edu.sg/handle/10635/227317||ISSN:||08939454
|Appears in Collections:||Staff Publications|
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