Unemployment Insurance or Individual Savings Accounts: Can Chile’s New Scheme Serve as a Model for Other Developing Countries?


Sehnbruch, Kirsten. (2006). Unemployment Insurance or Individual Savings Accounts: Can Chile’S New Scheme Serve as a Model for Other Developing Countries? International Social Security Review, 59(1), 27–48.

Abstract

In 2002 the Chilean government implemented new legislation for an unemployment insurance scheme. It has been presented at both national and international levels as a model for other developing countries, because it provides protection against unemployment, avoids issues of moral hazard associated with traditional unemployment insurance systems, and has a relatively low public finance requirement. The insurance combines a system of individual savings accounts with a publicly financed contingency fund. This article examines how it will work in practice, and whether it can indeed serve as a model.

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