Publication: Income Support for the Unemployed : Issues and Options
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2004
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2004
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With the aim to provide guidelines for countries wishing to introduce or improve income support systems for the unemployed, the book summarizes the evidence about the performance of five such systems: unemployment insurance, unemployment assistance, unemployment insurance savings accounts, severance pay, and public works. These systems are evaluated by two sets of criteria: (1) performance criteria, evaluating how well these systems work - how they protect incomes and what other, particularly efficiency related, effects they may have; and (2) design and implementation criteria, evaluating how these systems fit the country - how suitable are these programs given country-specific conditions, chief among them being labor market and other institutions, the capacity needed for administering income support programs, the size of the informal sector, and prevalence of private transfers. This report also offers summary evaluations of alternative systems by describing the strengths and weaknesses of each system and pointing out the country specific circumstances that are particularly conducive to performance.
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“Vodopivec, Milan. 2004. Income Support for the Unemployed : Issues and Options. World Bank regional and sectoral studies;. © World Bank. http://hdl.handle.net/10986/14922 License: CC BY 3.0 IGO.”
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Publication Choosing a System of Unemployment Income Support : Guidelines for Developing and Transition Countries(Oxford University Press on behalf of the World Bank, 2006-02-14)Mounting evidence suggests that excessive job protection reduces employment and labor market flows, hinders technological innovations, pushes workers into the informal sector, and hurts vulnerable groups by depriving them of job opportunities. Flexible labor markets stimulate job creation, investment, and growth, but they create job insecurity and displace some workers. How can the costs of such insecurity and displacements be minimized while ensuring that the labor market remains flexible? Each of the main unemployment income support systems (unemployment insurance, unemployment assistance, unemployment insurance savings accounts, severance pay, and public works) has strengths and weaknesses. 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But social policy has to deal with the same problems that render markets inefficient. Mandatory participation mitigates the problem of adverse selection, but the moral hazard problems remain. In addition, the existence of a social protection program may give rise to inefficiencies of its own. Particularly with the rise of unemployment in European Union in the last two decades, inefficiencies created by UI, the traditional and most widely used public program of income support for the unemployed in developed economies, have become more widely discussed, and solutions and alternatives sought.Publication Reforming Severance Pay : An International Perspective(World Bank, 2012)Throughout the developed and developing world there is growing demand for policies that would facilitate access to jobs by the most vulnerable, improve their earnings, and reduce their dependency on public support. As a result, governments are increasingly focused on removing obstacles faced by employers to create jobs and on instilling incentives for individuals to re-enter the labor market or to move toward more productive employment possibilities. Severance pay a program compensating formal workers for dismissal by employers or with an end-of-service benefit is often blamed for distorting employer hiring and firing decisions. Together with restrictive labor market regulations and other formal labor market features, this program is held responsible for excessive job protection with a negative impact on labor market outcomes, in particular affecting the most vulnerable. Despite this strong negative assessment among many labor market economists, surprisingly little is known about this program that exists in most countries around the world as a legally mandated benefit. This lack of knowledge may derive from the special 'positioning' of the program between labor code and social insurance; its origins were in the first policy domain, but its objectives for key programs were replicated in the second domain in particular unemployment and retirement benefits. This is the first-ever book to shed light on this program in a comprehensive manner its historical origins, its rationale, and its characteristics across the world. It reviews the soundness of the empirical accusation, assesses recent country reforms, and offers policy reform alternatives and policy guidance. The policy directions include folding severance pay into existing social insurance programs, where they exist, and to make severance pay contractual between market partners as a way to enhance efficiency in a knowledge-based economy. Folding severance pay into employment benefits may also be an opportunity to move away from unemployment insurance, which is fraught by moral hazard, toward a promising 'hybrid' system of unemployment insurance savings accounts supplemented by social pooling.
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