[Journal:] IZA Journal of Labor Policy [ISSN:] 2193-9004 [Publisher:] Springer [Place:] Heidelberg [Volume:] 2 [Year:] 2013 [Pages:] 1-23
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.
unemployment unemployment insurance monitoring of benefits unemployment insurance savings accounts