Is Jefes De Hogar an Employer of Last Resort Program? An Assessment of Argentina's Ability to Deliver the Promise of Full Employment and Price Stability

Abstract:     
This paper describes what has been called the "employer of last resort" (ELR) proposal as a policy to achieve true full employment without inflation. We answer three main concerns about the program: 1) How can the government afford to hire all those who might want to work? 2) Won't full employment cause inflation? 3) What will all those workers do?

In building the case for ELR, we show that the purpose of the program is to supplement, not replace, alternative employment, such as that provided by private firms or other government programs. Any country that operates with its own currency and adopts a floating exchange rate can implement an ELR program, but each nation might formulate the specifics of its program in accordance with its own political and economic situation.

Argentina is one such nation. The authors examine the institutional design of the Plan Jefes de Hogar and its impact on the Argentinean economy, and they draw parallels between the theoretical proposals for ELR and the practical experience with Jefes. Argentina's case demonstrates possible ways in which ELR can advance a sense of civic duty, citizenship, social cohesion, reciprocity, and community involvement. Furthermore, ELR can contribute to the redefinition of the meaning of work by commanding recognition that certain forms of labor, such as caring and community involvement, are socially useful. Finally, we uncover some deficiencies of the Jefes program and assess its ability to ensure true full employment and price stability.

Keywords: employer of last resort, ELR, full employment, Jefes de Hogar program, Argentina unemployment

JEL Classifications: E24, E62, E65, J68, N36

Working Paper Series