Higher severance pay in Argentina reduces job turnover, unemployment insurance prolongs joblessness.
The article examines how unemployment insurance and severance payments affect unemployment duration and job separations in Argentina. By analyzing data from reforms, it was found that higher unemployment insurance payments and longer coverage periods lead to longer unemployment spells. Severance pay, on the other hand, has a less consistent impact on unemployment duration. Additionally, higher severance pay reduces the likelihood of job separations, while unemployment insurance has a small positive effect on job separations.