Unemployment Insurance as a Subsidy to Risky Firms

• 成果类型: Article
• 署名作者: Van Doornik, Bernardus; Fazio, Dimas; Schoenherr, David; Skrastins, Janis
• 署名单位: Central Bank of Brazil; Bank for International Settlements (BIS); National University of Singapore; Princeton University; Washington University (WUSTL)
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhac013
• 发表日期: 2022
• 页码: 5535
• 关键词: MANAGERIAL; differentials; entitlement; INEQUALITY; duration; turnover; benefits; earnings; banks

摘要

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.