unemployment insurance

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unemployment insurance,

insurance against loss of wages during the time that an able-bodied worker is involuntarily unemployed. The goal of such insurance is to provide a minimal livelihood to unemployed workers until they are once again employed. Compulsory unemployment insurance makes such protection legally obligatory for certain classes of workers under prescribed conditions. Voluntary unemployment insurance is maintained by private organizations sanctioned, encouraged, or subsidized by the state. The first attempts to establish unemployment insurance plans began toward the end of the 19th cent. in Germany, Italy, and Switzerland (see social securitysocial security,
government program designed to provide for the basic economic security and welfare of individuals and their dependents. The programs classified under the term social security differ from one country to another, but all are the result of government legislation
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). Most Western European states adopted such plans in the early part of the 20th cent.: France, 1905; Great Britain, 1911; the Netherlands, 1916; Italy, 1919; and Germany, 1927. In the United States an unemployment insurance program, along with other welfare programs, was introduced by the Social Security Act of 1935. That act, amended many times, provides for a sliding scale of payroll taxes on industry. For example, employers whose records show that their business experiences little unemployment receive lower rates. The Employment and Training Administration in the U.S. Dept. of Labor is responsible for administering the law. Over the years Congress has extended the program to many workers initially not covered. By 1994 more than 96% of all workers were covered by unemployment insurance. Each state has its own unemployment insurance law and operates its own program.


See D. Nelson, Unemployment Insurance: The American Experience, 1915–1935 (1969); W. Vroman, Unemployment Insurance Trust Fund Adequacy in the 1990s (1990).

References in periodicals archive ?
7 million) - for unemployment insurance benefits, 13.
Total premium of social, health, and unemployment insurance was VND 261.
According to Sterling, that's significant since people who are unexpectedly laid off quickly discover that state unemployment insurance alone is not enough to cover mortgage payments, tuition, or medical bills.
The report, by Jobs Australia, an organisation for Not for Profit employment service providers, and authored by Deakin University professor, Andrew Scott, said that unemployment insurance would give people who lose their jobs a better chance to re-skill and gain employment.
This paper, by Henry Farber, Jesse Rothstein, and Robert Valletta, attempts to determine how severe was the employment disincentive effect of unemployment insurance in the wake of the last recession.
He said the rate freeze was included in different versions of the unemployment insurance reforms approved by the Senate earlier, and it was included in a bill that cleared the House last week that combined unemployment insurance reforms with a proposed hike in the minimum wage.
For the Centre for European Policy Studies (CEPS) and the Zentrum fur Europaische Wirtschaftsforschung (ZEW) - invited by EMPL to comment on the provisional findings of the study on 'The cost of non-Europe resulting from the absence of an unemployment insurance scheme for the euro area'(2) - such an EU scheme would have offered many advantages during the economic and financial crisis.
Under the Unemployment Insurance Law, employees are entitled to 60% of their last monthly salary for a period of six consecutive months following unemployment, whether in the case of resignation or termination.
Yet the rates that employers pay for unemployment insurance represent a cost of doing business, and overpayments result in rates that are higher than they need to be.
Adding that to the what the states provide--the traditional 26 weeks of benefits and 20 additional weeks of extended benefits--amounts to potentially being able to receive unemployment insurance benefits for 99 weeks (just about 2 years).
von Wachter, Columbia University and NBER; and Stefan Bender, Institut fur Arbeitsmarkt und Berufsforschung, "The Effects of Extended Unemployment Insurance over the Business Cycle: Evidence from Regression Discontinuity Estimates over Twenty Years"

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