Book Title
Navigating Unemployment Examining The Impact Of Employment Insurance During Job Losses
Summary
This report is the first attempt to measure the effectiveness of employment insurance (EI) benefits in sustaining the livelihood of the unemployed in Malaysia and its impact on jobseeking behavior. The employment insurance system in Malaysia has been around for almost three years since its introduction back in 2018 under Employment Insurance System Act 2017 (Act 800). To the best of our knowledge, there is no studies have been made to evaluate the effectiveness of its implementation.
The contributions made by this report to this field came in the form of the empirical framework using a survey-based approach designed to measure the impact of EI benefits towards sustaining livelihood and job-seeking behavior of EI recipients. The findings documented in this report can be helpful to assist policymakers particularly the public employment services agency in formulating an evidence-based approach to help the unemployed.
A survey approach is used to measure the impacts of EI benefits on the livelihood and behavior of recipients. The main reason this study applies a survey-based approach is the capacity and capability to capture details behavior of EI recipients and financial conditions taking into account and expenses. In contrast, the real-time administrative data only capture the income and employment characteristics of recipients.
In general, the effectiveness of EI programs can vary depending on the specific design and implementation of the program, as well as the broader economic context. In our case, results clearly show the positive impacts of EI in providing financial support during unemployment periods and assisting workers in new jobs. About 55% of the respondents received Job Search Allowance (JSA) in less than three months, indicating the speed of getting a new job. The majority of re-employment EI recipients satisfy their post-unemployment jobs.
This study shows that EI can have an impact on the behavior of workers in several ways. First, EI incentivizes job search behavior by providing financial support during periods of unemployment. Results show that almost all the recipients of JSA prioritize the job search and the majority of them apply various methods of job search to optimize the opportunities. Second, support from the EI system contributes to the confidence level of JSA recipients in finding jobs. Third, training supports provided to them are a good fit with their requirements for a new job.
The only concerns regarding the behavior of workers are the mental health and well-being of the respondents that were affected due to job losses. Empirical assessment using the survey data indicates that financial strain correlates positively to mental health. In our view, designing mental health support program can help individuals cope with the emotions of unemployed workers and their well-being. Another issue that is equally important to note is that return to work for EI recipients is relatively lower around 50%. Specific interventions need to pay attention to improve the speed of job matching.
For further information on the report, please email enquiry@euera.org.
