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The US Unemployment Insurance Scheme: A Model for the EU?

Author

Listed:
  • Christiaan Luigjes

    (University of Amsterdam)

  • Georg Fischer

    (Vienna Institute for Intern. Economic Studies)

  • Frank Vandenbroucke

    (University of Amsterdam)

Abstract

The system of unemployment insurance (UI) used in the United States has often been cited as a model for Europe. The American model illustrates that it is possible to create and maintain a UI system based on federal-state co-financing that intensifies during economic crises and thus reinforces protection and stabilisation. Central requirements and conditional funding can improve the aggregate protection and stabilisation capacity of the system. However, the architecture of the US system financially incentivises states to organise retrenchment of their own efforts for UI, which in turn leads to a divergence of benefit generosity and coverage levels. During the Great Recession, the federal government mitigated these incentives for retrenchment through minimum requirements attached to federal financial intervention. With regards to the European unemployment re-insurance system debate, the US experience implies both positive and encourageing conclusions and cautionary lessons.

Suggested Citation

  • Christiaan Luigjes & Georg Fischer & Frank Vandenbroucke, 2019. "The US Unemployment Insurance Scheme: A Model for the EU?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 54(5), pages 314-318, September.
    • Handle: RePEc:spr:intere:v:54:y:2019:i:5:d:10.1007_s10272-019-0844-x
    DOI: 10.1007/s10272-019-0844-x
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    Cited by:

    1. 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.
    2. Günther Schmid, 2020. "Beyond European unemployment insurance. Less moral hazard, more moral assurance?," Transfer: European Review of Labour and Research, , vol. 26(4), pages 465-480, November.

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