Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/62440
Authors: 
Margolis, David N.
Navarro, Lucas
Robalino, David A.
Year of Publication: 
2012
Series/Report no.: 
Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6660
Abstract: 
This paper analyses the potential impacts of introducing unemployment insurance (UI) in middle income countries using the case of Malaysia, which today does not have such a system. The analysis is based on a job search model with unemployment and three employment sectors: formal and informal wage employment, and self employment. The parameters of the model are estimated to replicate the structure of the labor market in Malaysia in 2009 and the distribution of earnings for informal, formal and self employed workers. The results suggest that unemployment insurance would have only a modest negative effect on unemployment if benefits are not overly generous. The main effect would be a reallocation of labor from wage into self employment while increasing average wages in the formal and informal sectors.
Subjects: 
unemployment insurance
informal sector
self employment
job search
JEL: 
J64
J65
O17
J23
J31
J21
J62
Document Type: 
Working Paper

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