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The Introduction of an EU Unemployment Reinsurance System: Income Protection and Maintenance of Consumption

Author

Listed:
  • Ales Trunk

    (International School for Social and Business Studies, Slovenia)

  • Igor Stubelj

    (University of Primorska, Slovenia)

Abstract

The paper deals with the suitability of the introduction of unemployment reinsurance in the countries of the European Union (URS EU) in terms of maintaining the level of consumption of the unemployed and promoting economic efficiency. Based on the literature review, the analysis of the US reinsurance system and the analysis of existing unemployment insurance in the EU, a model of the reinsurance system for unemployment in the EUu is developed. The model simulation, based on the data of existing EU-20 unemployment insurance systems in the period 2003--2019, is used to determine the amount of reinsurance payments to countries and the level of contributions needed, while employing various ways of defining payment triggers. We have demonstrated that the URS EU would contribute to better income protection by having a direct impact on the income of the unemployed and at the same time acting as an automatic stabilizer of the economy.

Suggested Citation

  • Ales Trunk & Igor Stubelj, 2022. "The Introduction of an EU Unemployment Reinsurance System: Income Protection and Maintenance of Consumption," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 20(2 (Summer), pages 109-138.
    • Handle: RePEc:mgt:youmgt:v:20:y:2022:i:2:p:109-138
    DOI: 10.26493/1854-6935.20.109-138
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    References listed on IDEAS

    as
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    3. Schmid, Günther, 2020. "Beyond European unemployment insurance. Less moral hazard, more moral assurance?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 26(4), pages 465-480.
    4. Davoine, Thomas & Molnar, Matthias, 2020. "Cross-country fiscal policy spillovers and capital-skill complementarity in integrated capital markets," Economic Modelling, Elsevier, vol. 88(C), pages 132-150.
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    More about this item

    Keywords

    recession; unemployment; insurance; reinsurance; European Union; model simulation; consumption; automatic stabilizer;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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