TY  - GEN
AU  - Bérgolo, Marcelo
AU  - Ferrando, Mery
AU  - Giaccobasso, Matias
AU  - Vilá, Joan
TI  - Job Loss and the Role of Public Policies for Vulnerable Workers
PY  - 2026
Y1  - 2026/07/21
DO  - 10.18235/0014409
AB  - Job displacement generates large and persistent income losses. This paper examines how alternative social protection mechanisms mitigate the consequences of job loss in Uruguay, a middle-income country with a relatively well-developed social safety net. Using matched employer-employee administrative data, we combine variation from mass layoffs with difference-in-differences and regression-discontinuity designs to estimate the effects of job displacement and the insurance value of two policies: (i) a traditional contributory unemployment insurance program and (ii) a noncontributory conditional cash transfer program targeting low-income households. We document that after employment falls it gradually rebounds, while earnings decline sharply, with labor income falling by about 50% in the short term, and remain below pre-displacement levels even five years later. The persistent earnings losses are primarily driven by lower post-displacement wages. Comparing the insurance value of alternative policy responses, we find that the cash transfer program provides substantial protection for vulnerable and middle-income workers facing layoffs, while unemployment insurance does not generate comparable medium-term gains.
UR  - https://doi.org/10.18235/0014409
ER  -