Unemployment insurance and unemployment assistance : a comparison
AbstractThis report examines the two most common programs that provide cash compensation to unemployed workers: unemployment insurance (UI) and unemployment assistance (UA). It compares them in two areas: costs and labor market disincentives. The cost analysis first derives a framework for examining costs, and then applies the framework to both UI and UA programs. Costs are estimated for several countries, but particular attention is given to Australia, Canada and the United States. A major finding is that UA is not necessarily less costly than UI even though UA conditions eligibility on household income and assets. One must examine the specifics of a country's situation to make a cost comparison. The analysis of labor market disincentive effects reviews much of the relevant literature. It notes that the disincentive effects are present for both UI and UA but that the disincentives are different for the two types of unemployment protection programs.
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Bibliographic InfoPaper provided by The World Bank in its series Social Protection Discussion Papers with number 24084.
Date of creation: 30 Apr 2002
Date of revision:
Economic Theory&Research; Youth and Governance; Environmental Economics&Policies; Social Protections&Assistance; Labor Markets;
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