Munich Personal RePEc Archive

Cessation of activity benefit of Spanish self-employed workers: a heterogeneous impact evaluation

Moral-Arce, Ignacio and Martín-Román, Javier and Martín-Román, Ángel L. (2018): Cessation of activity benefit of Spanish self-employed workers: a heterogeneous impact evaluation.

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Abstract

The goal of this paper is to evaluate the effects of a public policy implemented through the Spanish Social Security system: the Cessation of Activity Benefit (CAB) for self-employed workers. Making use of the Continuous Sample of Working Lives (MCVL) and by means of a Propensity Score Matching (PSM) methodology, our results show that, when we do not take into account heterogeneity in the treatment, self-employed workers receiving CAB experience non-employment spells between 22 and 33 logarithmic points longer than their not entitled counterparts. We also detect that this difference is not constant but depends on the likelihood of being treated. We believe that the two traditional problems that affect the insurance markets, consequence of the asymmetric information, adverse selection and moral hazard, are behind these results.

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