Job search, unemployment protection, and informal work

Long, Iain W. ORCID: https://orcid.org/0000-0002-3607-4031 and Polito, Vito 2022. Job search, unemployment protection, and informal work. Oxford Economic Papers 74 (4) , pp. 1110-1138. 10.1093/oep/gpab063

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Abstract

Informal work is a significant feature of labour markets in many developed countries, despite having unemployment protection (UP) programmes. We use a model of job search over the duration of unemployment to study how the structure of these programmes influences the incentive of the unemployed to engage in informal work while searching for formal jobs. Accounting for informality enables the model to jointly explain three known features on job search dynamics: a temporary re-employment spike, low search effort, and negative duration dependence. The quantitative analysis finds that both informality and unemployment can be reduced by redistributing (across either workers or programmes), rather than increasing, the overall UP budget.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Oxford University Press
ISSN:	0030-7653
Date of First Compliant Deposit:	6 January 2022
Date of Acceptance:	27 December 2021
Last Modified:	27 Dec 2023 17:57
URI:	https://orca.cardiff.ac.uk/id/eprint/146424

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