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The political economy of unemployment insurance based on individual savings account: lessons from Chile

Sehnbruch, Kirsten, Carranza, Rafael and Prieto, José Joaquín (2018) The political economy of unemployment insurance based on individual savings account: lessons from Chile. Development and Change. pp. 1-28. ISSN 0012-155X

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Identification Number: 10.1111/dech.12457


In recent years, unemployment protection systems based on individual savings have been instituted in several developing countries. Chile was one of the first to establish such a system, which at the time was widely cited as a model for other countries. This article discusses the particular political context in which the Chilean system was created before examining how it works in terms of coverage and levels of benefits received by unemployed workers. The authors undertake a detailed analysis of the administrative data produced by the system and conclude that the insurance covers only a small proportion of the unemployed, as most workers generally had precarious jobs that did not allow them to contribute to the system consistently. The Chilean case illustrates how difficult it is to establish functioning unemployment insurance in developing countries with precarious labour markets. Based on the interaction between employment characteristics and the conditions imposed by the benefit system, the article assesses the efficacy of the Unemployment Insurance Savings Accounts (UISA) system and analyses whether it can indeed serve as a model for other developing countries.

Item Type: Article
Official URL:
Additional Information: © 2018 International Institute of Social Studies
Divisions: Social Policy
Subjects: H Social Sciences > HN Social history and conditions. Social problems. Social reform
H Social Sciences > HV Social pathology. Social and public welfare. Criminology
JEL classification: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E24 - Macroeconomics: Employment; Unemployment; Wages; Intergenerational Income Distribution (includes wage indexation)
I - Health, Education, and Welfare > I3 - Welfare and Poverty
Date Deposited: 21 Nov 2018 17:09
Last Modified: 15 May 2024 23:22
Funders: Seventh Framework Programme Grant, Centre for Social Conflict and Cohesion

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