The paper analyzes key labor market and institutional features of developing countries that affect functioning of unemployment insurance: a large informal sector, weak administrative capacity, and large political risk. It argues that these countries should tailor an OECD-style unemployment insurance program to their circumstances, among others by relying on self-insurance (via unemployment insurance savings accounts), complemented by solidarity funding, as a key source of financing; by simplifying monitoring of job-search behavior and labor market status; and by piggybacking on existing networks to administer benefits. The paper also addresses the question whether developing countries should introduce unemployment insurance. JEL codes: J65, J68
CITATION STYLE
Vodopivec, M. (2013). Introducing unemployment insurance to developing countries. IZA Journal of Labor Policy, 2(1). https://doi.org/10.1186/2193-9004-2-1
Mendeley helps you to discover research relevant for your work.