Publication: Unemployment Insurance: Efficiency Effects and Lessons for Developing Countries
Unemployment insurance (UI) is the most common public income support program for the unemployed in developed countries.1 In these countries, it typically offers good protection: it covers the majority of employed persons, irrespective of occupation or industry, and provides adequate smoothening of consumption patterns. For example, studies on the U.S. find that the welfare of benefit recipient households is on average only 3-8 percent lower than the welfare of otherwise identical households, and that in the absence of unemployment insurance, average consumption expenditures would fall by about 20 percent. In the last decade, UI programs have been introduced in transition countries, and their use in developing countries is on the rise as well.
“Vodopivec, Milan. 2004. Unemployment Insurance: Efficiency Effects and Lessons for Developing Countries. World Bank Employment Policy Primer; No. 5. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/f6d1629c-3f6b-588c-a660-8fbf81787835 License: CC BY 3.0 IGO.”