Efectos de las prestaciones por desempleo del Mecanismo de Protección al Cesante sobre la probabilidad de ocuparse en la formalidad y sobre la calidad de los emparejamientos

In 2013, the Colombian government created the “Mecanismo de Proteccion al Cesante”, a mechanism for unemployed individuals to reach consumption smoothing and facilitate their re-entering into the workforce. This study estimates the medium (12 months) and long term (18 months) impacts of the unemployment benefits on the probability to access to a formal employment and on labour-income. The document adapts and applies a non-experimental evaluation methodology —differences in differences (DD)—. It was discovered that being a beneficiary of MPC increases, only in the medium term, the probability to remain in the formal labour market, understood as the social security contribution to health care and pension benefits, but in the long term this probability decreases. Also, in the medium and long term, it was found that the program has negative impacts on the matching quality of the employments achieved by the beneficiaries of the program, which means, the scheme fails to stabilize the income of the unemployed to obtain better job matches in the form of better-paying jobs.