The Newly Unemployed and the UIF Take-up Rate : Implications for the Wage Subsidy Proposal in South Africa

This paper investigates the take-up rate or claim-waiting period rate of the unemployed under the South African Unemployment Insurance Fund (UIF) system. The goal is to identify disincentive effects that income replacement rates (IRR) and accumulat...

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Bibliographic Details
Main Authors: Bhorat, Haroon, Tseng, David
Format: Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2017
Subjects:
APR
GDP
Online Access:http://documents.worldbank.org/curated/en/900451468294071859/The-newly-unemployed-and-the-UIF-take-up-rate-implications-for-the-wage-subsidy-proposal-in-South-Africa
http://hdl.handle.net/10986/27455
id okr-10986-27455
recordtype oai_dc
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic ADVERSE INCENTIVE EFFECTS
AGE GROUP
ALLOCATION
ALLOCATIVE EFFICIENCY
AMOUNT OF CREDITS
APR
ASSETS
BARGAINING
BORROWING
BUDGET CONSTRAINT
CLAIM
CLAIMANT
CLAIMING UNEMPLOYMENT
CLIMATE
COLLUSION
CONSUMPTION PATTERNS
CONSUMPTION SMOOTHING
CREATING JOB
CREDITS
DEPENDENT
DISMISSAL
EARNING
ECONOMIC RESEARCH
ECONOMIC STATISTICS
EFFICIENCY GAINS
EMPLOYEE
EMPLOYMENT HISTORY
EMPLOYMENT OPPORTUNITIES
EMPLOYMENT PROBABILITY
EMPLOYMENT RETENTION
EMPLOYMENT SECURITY
FEMALE EMPLOYMENT
FINANCIAL ASSISTANCE
FINANCIAL COMMITMENTS
FINANCIAL COMPENSATION
FINANCIAL CONSTRAINT
FINANCIAL CRISIS
FINDING JOBS
GDP
GENERAL EQUILIBRIUM
GENERAL EQUILIBRIUM MODEL
GOVERNMENT SUBSIDIES
GROWTH RATE
HIGH WAGES
HOUSEHOLD CHARACTERISTICS
HOUSEHOLD WEALTH
HUMAN CAPITAL
HUMAN RESOURCES
INCOME
INFORMAL SECTOR
INSOLVENCIES
INSOLVENCY
INSURANCE CLAIMS
INSURANCE POLICIES
INSURANCE SCHEME
INSURANCE SYSTEMS
JOB CREATION
JOB LOSSES
JOB MARKET
JOB SEARCH
JOBS
LABOR ECONOMICS
LABOR MARKET
LABOR RELATIONS
LABOR SUPPLY
LABOUR
LABOUR DEMAND
LABOUR FORCE
LABOUR MARKET
LABOUR MARKET EFFICIENCY
LABOUR MARKETS
LABOUR RELATIONS
LABOUR STANDARDS
LABOUR SUPPLY
LIQUIDITY
MALE WORKER
MORAL HAZARD
MOTIVATION
NATIONAL UNEMPLOYMENT
NATIONAL UNEMPLOYMENT RATES
NEGOTIATIONS
OLDER WORKERS
PENALTY
PERMANENT INCOME
POLICY IMPLICATIONS
POLITICAL ECONOMY
PRINCIPAL AGENT PROBLEM
PRIVATE SECTOR
PRODUCTIVE EMPLOYMENT
PRODUCTIVITY
PRODUCTIVITY GAINS
PROFIT MARGIN
PROPORTIONAL HAZARD MODEL
PUBLIC ECONOMICS
RATE OF UNEMPLOYMENT
REEMPLOYMENT SUCCESS
RELATED CLAIMS
RESIGNATION
RISING UNEMPLOYMENT
RISK SHARING
SAFETY
SAFETY NET
SALARY
SECONDARY SCHOOLING
SKILLED WORKERS
SKILLS DEVELOPMENT
SOCIAL COSTS
STRUCTURAL UNEMPLOYMENT
SUBSTITUTION
SUBSTITUTION EFFECTS
SURVIVAL ANALYSIS
SURVIVAL RATE
TRUST FUND
UNEMPLOYED
UNEMPLOYED INDIVIDUAL
UNEMPLOYED PERSONS
UNEMPLOYED WORKERS
UNEMPLOYMENT
UNEMPLOYMENT BENEFITS
UNEMPLOYMENT DURATION
UNEMPLOYMENT INSURANCE
UNEMPLOYMENT INSURANCE BENEFITS
UNEMPLOYMENT INSURANCE FUND
UNEMPLOYMENT INSURANCE PROGRAM
UNEMPLOYMENT INSURANCE SYSTEM
UNEMPLOYMENT SPELL
VOLUNTARY UNEMPLOYMENT
WAGE GAIN
WAGE LEVELS
WAGE RATES
WAGE SUBSIDY
WAGE SUBSIDY INTERVENTION
WAGE SUBSIDY SCHEME
WELFARE SYSTEM
WORKER
WORKING POOR
YOUNG WORKERS
YOUNGER WORKERS
YOUTH UNEMPLOYMENT
YOUTH UNEMPLOYMENT RATES
spellingShingle ADVERSE INCENTIVE EFFECTS
AGE GROUP
ALLOCATION
ALLOCATIVE EFFICIENCY
AMOUNT OF CREDITS
APR
ASSETS
BARGAINING
BORROWING
BUDGET CONSTRAINT
CLAIM
CLAIMANT
CLAIMING UNEMPLOYMENT
CLIMATE
COLLUSION
CONSUMPTION PATTERNS
CONSUMPTION SMOOTHING
CREATING JOB
CREDITS
DEPENDENT
DISMISSAL
EARNING
ECONOMIC RESEARCH
ECONOMIC STATISTICS
EFFICIENCY GAINS
EMPLOYEE
EMPLOYMENT HISTORY
EMPLOYMENT OPPORTUNITIES
EMPLOYMENT PROBABILITY
EMPLOYMENT RETENTION
EMPLOYMENT SECURITY
FEMALE EMPLOYMENT
FINANCIAL ASSISTANCE
FINANCIAL COMMITMENTS
FINANCIAL COMPENSATION
FINANCIAL CONSTRAINT
FINANCIAL CRISIS
FINDING JOBS
GDP
GENERAL EQUILIBRIUM
GENERAL EQUILIBRIUM MODEL
GOVERNMENT SUBSIDIES
GROWTH RATE
HIGH WAGES
HOUSEHOLD CHARACTERISTICS
HOUSEHOLD WEALTH
HUMAN CAPITAL
HUMAN RESOURCES
INCOME
INFORMAL SECTOR
INSOLVENCIES
INSOLVENCY
INSURANCE CLAIMS
INSURANCE POLICIES
INSURANCE SCHEME
INSURANCE SYSTEMS
JOB CREATION
JOB LOSSES
JOB MARKET
JOB SEARCH
JOBS
LABOR ECONOMICS
LABOR MARKET
LABOR RELATIONS
LABOR SUPPLY
LABOUR
LABOUR DEMAND
LABOUR FORCE
LABOUR MARKET
LABOUR MARKET EFFICIENCY
LABOUR MARKETS
LABOUR RELATIONS
LABOUR STANDARDS
LABOUR SUPPLY
LIQUIDITY
MALE WORKER
MORAL HAZARD
MOTIVATION
NATIONAL UNEMPLOYMENT
NATIONAL UNEMPLOYMENT RATES
NEGOTIATIONS
OLDER WORKERS
PENALTY
PERMANENT INCOME
POLICY IMPLICATIONS
POLITICAL ECONOMY
PRINCIPAL AGENT PROBLEM
PRIVATE SECTOR
PRODUCTIVE EMPLOYMENT
PRODUCTIVITY
PRODUCTIVITY GAINS
PROFIT MARGIN
PROPORTIONAL HAZARD MODEL
PUBLIC ECONOMICS
RATE OF UNEMPLOYMENT
REEMPLOYMENT SUCCESS
RELATED CLAIMS
RESIGNATION
RISING UNEMPLOYMENT
RISK SHARING
SAFETY
SAFETY NET
SALARY
SECONDARY SCHOOLING
SKILLED WORKERS
SKILLS DEVELOPMENT
SOCIAL COSTS
STRUCTURAL UNEMPLOYMENT
SUBSTITUTION
SUBSTITUTION EFFECTS
SURVIVAL ANALYSIS
SURVIVAL RATE
TRUST FUND
UNEMPLOYED
UNEMPLOYED INDIVIDUAL
UNEMPLOYED PERSONS
UNEMPLOYED WORKERS
UNEMPLOYMENT
UNEMPLOYMENT BENEFITS
UNEMPLOYMENT DURATION
UNEMPLOYMENT INSURANCE
UNEMPLOYMENT INSURANCE BENEFITS
UNEMPLOYMENT INSURANCE FUND
UNEMPLOYMENT INSURANCE PROGRAM
UNEMPLOYMENT INSURANCE SYSTEM
UNEMPLOYMENT SPELL
VOLUNTARY UNEMPLOYMENT
WAGE GAIN
WAGE LEVELS
WAGE RATES
WAGE SUBSIDY
WAGE SUBSIDY INTERVENTION
WAGE SUBSIDY SCHEME
WELFARE SYSTEM
WORKER
WORKING POOR
YOUNG WORKERS
YOUNGER WORKERS
YOUTH UNEMPLOYMENT
YOUTH UNEMPLOYMENT RATES
Bhorat, Haroon
Tseng, David
The Newly Unemployed and the UIF Take-up Rate : Implications for the Wage Subsidy Proposal in South Africa
geographic_facet Africa
South Africa
description This paper investigates the take-up rate or claim-waiting period rate of the unemployed under the South African Unemployment Insurance Fund (UIF) system. The goal is to identify disincentive effects that income replacement rates (IRR) and accumulated credits may have on the claimant's behavior in terms of their claim waiting period rate (or how quickly they apply for UIF benefits). Utilizing nonparametric and semi-parametric estimation techniques, we find that there is little evidence, if any, for job disincentives or moral hazard problems. More specifically, the majority of claimants that are quickest to claim the UIF benefits are those who have worked continuously for at least four years and accumulated the maximum allowable amount of credits. The authors also note that claimants' waiting periods are indifferent with regard to levels of income replacements yet extremely sensitive to the amount of credits accumulated. Ultimately, the recipients of the UIF benefits do not rely heavily on the replacement incomes and prefer waiting longer for employment opportunities as opposed to exhausting their accumulated credits. The semi-parametric Cox's Proportional Hazard (PH) model confirms that there is a positive relationship between the claimant's accumulation of credits and the associated take-up rate of the UIF.
format Working Paper
author Bhorat, Haroon
Tseng, David
author_facet Bhorat, Haroon
Tseng, David
author_sort Bhorat, Haroon
title The Newly Unemployed and the UIF Take-up Rate : Implications for the Wage Subsidy Proposal in South Africa
title_short The Newly Unemployed and the UIF Take-up Rate : Implications for the Wage Subsidy Proposal in South Africa
title_full The Newly Unemployed and the UIF Take-up Rate : Implications for the Wage Subsidy Proposal in South Africa
title_fullStr The Newly Unemployed and the UIF Take-up Rate : Implications for the Wage Subsidy Proposal in South Africa
title_full_unstemmed The Newly Unemployed and the UIF Take-up Rate : Implications for the Wage Subsidy Proposal in South Africa
title_sort newly unemployed and the uif take-up rate : implications for the wage subsidy proposal in south africa
publisher World Bank, Washington, DC
publishDate 2017
url http://documents.worldbank.org/curated/en/900451468294071859/The-newly-unemployed-and-the-UIF-take-up-rate-implications-for-the-wage-subsidy-proposal-in-South-Africa
http://hdl.handle.net/10986/27455
_version_ 1764464346882113536
spelling okr-10986-274552021-04-23T14:04:42Z The Newly Unemployed and the UIF Take-up Rate : Implications for the Wage Subsidy Proposal in South Africa Bhorat, Haroon Tseng, David ADVERSE INCENTIVE EFFECTS AGE GROUP ALLOCATION ALLOCATIVE EFFICIENCY AMOUNT OF CREDITS APR ASSETS BARGAINING BORROWING BUDGET CONSTRAINT CLAIM CLAIMANT CLAIMING UNEMPLOYMENT CLIMATE COLLUSION CONSUMPTION PATTERNS CONSUMPTION SMOOTHING CREATING JOB CREDITS DEPENDENT DISMISSAL EARNING ECONOMIC RESEARCH ECONOMIC STATISTICS EFFICIENCY GAINS EMPLOYEE EMPLOYMENT HISTORY EMPLOYMENT OPPORTUNITIES EMPLOYMENT PROBABILITY EMPLOYMENT RETENTION EMPLOYMENT SECURITY FEMALE EMPLOYMENT FINANCIAL ASSISTANCE FINANCIAL COMMITMENTS FINANCIAL COMPENSATION FINANCIAL CONSTRAINT FINANCIAL CRISIS FINDING JOBS GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GOVERNMENT SUBSIDIES GROWTH RATE HIGH WAGES HOUSEHOLD CHARACTERISTICS HOUSEHOLD WEALTH HUMAN CAPITAL HUMAN RESOURCES INCOME INFORMAL SECTOR INSOLVENCIES INSOLVENCY INSURANCE CLAIMS INSURANCE POLICIES INSURANCE SCHEME INSURANCE SYSTEMS JOB CREATION JOB LOSSES JOB MARKET JOB SEARCH JOBS LABOR ECONOMICS LABOR MARKET LABOR RELATIONS LABOR SUPPLY LABOUR LABOUR DEMAND LABOUR FORCE LABOUR MARKET LABOUR MARKET EFFICIENCY LABOUR MARKETS LABOUR RELATIONS LABOUR STANDARDS LABOUR SUPPLY LIQUIDITY MALE WORKER MORAL HAZARD MOTIVATION NATIONAL UNEMPLOYMENT NATIONAL UNEMPLOYMENT RATES NEGOTIATIONS OLDER WORKERS PENALTY PERMANENT INCOME POLICY IMPLICATIONS POLITICAL ECONOMY PRINCIPAL AGENT PROBLEM PRIVATE SECTOR PRODUCTIVE EMPLOYMENT PRODUCTIVITY PRODUCTIVITY GAINS PROFIT MARGIN PROPORTIONAL HAZARD MODEL PUBLIC ECONOMICS RATE OF UNEMPLOYMENT REEMPLOYMENT SUCCESS RELATED CLAIMS RESIGNATION RISING UNEMPLOYMENT RISK SHARING SAFETY SAFETY NET SALARY SECONDARY SCHOOLING SKILLED WORKERS SKILLS DEVELOPMENT SOCIAL COSTS STRUCTURAL UNEMPLOYMENT SUBSTITUTION SUBSTITUTION EFFECTS SURVIVAL ANALYSIS SURVIVAL RATE TRUST FUND UNEMPLOYED UNEMPLOYED INDIVIDUAL UNEMPLOYED PERSONS UNEMPLOYED WORKERS UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT DURATION UNEMPLOYMENT INSURANCE UNEMPLOYMENT INSURANCE BENEFITS UNEMPLOYMENT INSURANCE FUND UNEMPLOYMENT INSURANCE PROGRAM UNEMPLOYMENT INSURANCE SYSTEM UNEMPLOYMENT SPELL VOLUNTARY UNEMPLOYMENT WAGE GAIN WAGE LEVELS WAGE RATES WAGE SUBSIDY WAGE SUBSIDY INTERVENTION WAGE SUBSIDY SCHEME WELFARE SYSTEM WORKER WORKING POOR YOUNG WORKERS YOUNGER WORKERS YOUTH UNEMPLOYMENT YOUTH UNEMPLOYMENT RATES This paper investigates the take-up rate or claim-waiting period rate of the unemployed under the South African Unemployment Insurance Fund (UIF) system. The goal is to identify disincentive effects that income replacement rates (IRR) and accumulated credits may have on the claimant's behavior in terms of their claim waiting period rate (or how quickly they apply for UIF benefits). Utilizing nonparametric and semi-parametric estimation techniques, we find that there is little evidence, if any, for job disincentives or moral hazard problems. More specifically, the majority of claimants that are quickest to claim the UIF benefits are those who have worked continuously for at least four years and accumulated the maximum allowable amount of credits. The authors also note that claimants' waiting periods are indifferent with regard to levels of income replacements yet extremely sensitive to the amount of credits accumulated. Ultimately, the recipients of the UIF benefits do not rely heavily on the replacement incomes and prefer waiting longer for employment opportunities as opposed to exhausting their accumulated credits. The semi-parametric Cox's Proportional Hazard (PH) model confirms that there is a positive relationship between the claimant's accumulation of credits and the associated take-up rate of the UIF. 2017-06-28T18:49:33Z 2017-06-28T18:49:33Z 2011-08 Working Paper http://documents.worldbank.org/curated/en/900451468294071859/The-newly-unemployed-and-the-UIF-take-up-rate-implications-for-the-wage-subsidy-proposal-in-South-Africa http://hdl.handle.net/10986/27455 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: Working Paper Publications & Research Africa South Africa