Unemployment Benefits for Self-employed Workers: An Evaluation Using Survival Analysis

Moral-Arce, Ignacio and Martín-Román, Javier and Martín-Román, Ángel L. (2025): Unemployment Benefits for Self-employed Workers: An Evaluation Using Survival Analysis.

Abstract

This paper examines the effect of the Cessation of Activity Benefit (CAB)—a government policy aimed at self-employed workers—on non-employment spell durations in Spain. Using data from the Spanish Continuous Sample of Working Lives (MCVL), we apply flexible semiparametric survival models to address limitations of standard duration analysis. Our results show that self-employed individuals who receive the CAB experience non-employment spells approximately 4 to 6 months longer than their non-recipient counterparts. The extended duration appears largely driven by a moral hazard effect, as many beneficiaries remain out of work until the maximum benefit period (12 months) expires. These findings suggest that while the CAB provides valuable income support, it may inadvertently discourage timely re-entry into the labour market.

• Item Type: MPRA Paper
• Language: English
• Keywords: Self-employment, Evaluation, Survival Analysis, Opportunistic Behaviour.
• Subjects: D - Microeconomics > D0 - General > D04 - Microeconomic Policy: Formulation, Implementation, and Evaluation; J - Labor and Demographic Economics > J0 - General > J08 - Labor Economics Policies; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J64 - Unemployment: Models, Duration, Incidence, and Job Search; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J65 - Unemployment Insurance ; Severance Pay ; Plant Closings; K - Law and Economics > K3 - Other Substantive Areas of Law > K31 - Labor Law

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