Relation of Unemployment Insurance to Relief in the United States

1939 ◽  
Vol 13 (1) ◽  
pp. 63-76
Author(s):  
Ellery F. Reed
Keyword(s):  
United States ◽  
Unemployment Insurance ◽  
The United States

Unemployment Insurance

2014 ◽  
Author(s):  
Stephen A. Woodbury
Keyword(s):  
United States ◽  
Federal Government ◽  
Unemployment Insurance ◽  
Great Recession ◽  
The United States ◽  
Federal State ◽  
Income Support ◽  
The Great Recession ◽  
System P ◽  
Primary Responsibility

Unemployment insurance (UI) provides temporary income support to workers who have lost their jobs and are seeking reemployment. This chapter reviews the origins of the federal-state UI system in the United States and outlines its principles and goals. It also describes the conditions for benefit eligibility, the benefits themselves, and their financing. The UI system is complex and includes many interested parties, including employers, worker advocates, state UI administrators, and the federal government. These parties’ differing views have led to controversies over benefit eligibility, adequacy, and whether the states or federal government should bear primary responsibility for UI. The Great Recession caused most states’ UI trust funds to become insolvent and led to renewed debate over the structure and financing of the system.

Informal Labor and the Efficiency Cost of Social Programs: Evidence from Unemployment Insurance in Brazil

2021 ◽  
Vol 13 (3) ◽  
pp. 167-206
Author(s):  
François Gerard ◽  
Gustavo Gonzaga
Keyword(s):  
United States ◽  
Moral Hazard ◽  
Labor Markets ◽  
Unemployment Insurance ◽  
The United States ◽  
Social Programs ◽  
Informal Labor ◽  
Experimental Variation ◽  
Efficiency Cost ◽  
Quasi Experimental

It is widely believed that the presence of a large informal sector increases the efficiency cost of social programs in developing countries. We evaluate such claims for the case of unemployment insurance (UI) by combining an optimal UI framework with comprehensive data from Brazil. Using quasi-experimental variation in potential UI duration, we find clear evidence for the usual moral hazard problem that UI reduces incentives to return to a formal job. Yet, the associated efficiency cost is lower than it is in the United States, and it is lower in labor markets with higher informality within Brazil. This is because formal reemployment rates are lower to begin with where informality is higher, so that a larger share of workers would draw UI benefits absent any moral hazard. In sum, efficiency concerns may actually become more relevant as an economy formalizes. (JEL J65, O15, O17, E26, D82, J46)

UI ELIGIBILITY RULE, MORAL HAZARD, AND OPTIMAL UNEMPLOYMENT TRANSFER SCHEME

2017 ◽  
Vol 23 (4) ◽  
pp. 1586-1621
Author(s):  
Min Zhang ◽  
Jia Pan
Keyword(s):  
United States ◽  
Moral Hazard ◽  
Unemployment Insurance ◽  
Strategic Behavior ◽  
The United States ◽  
Imperfect Monitoring ◽  
Transfer Scheme ◽  
Moral Hazards ◽  
Job Searches ◽  
Key Features

This paper derives the optimal unemployment insurance (UI) transfer scheme, UI benefits, and UI contribution fees: When a worker has to earn his or her UI eligibility through work, the UI benefits do not last forever, and the UI agency has imperfect monitoring power on the strategic behavior of the worker. We show that the consideration of the UI eligibility rule generates the effective entitlement effect, which serves as an additional incentive device and alters the nature of the optimal UI transfer scheme established in literature. In contrast with previous studies, we find that when the effective entitlement effect is large, it completely removes the moral hazards in job searches, job acceptances, and job quits. As a result, the optimal UI benefits and contribution fees become constant. Calibrated to the data in the United States, the model reproduces some key features of the existing UI system.

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