Unemployment is one of the ‘old risks’ that modern welfare states can be seen to have responded to, but continues to be of great importance in the twenty-first century. Unemployment insurance also appears to be more ridden by political conflicts than other social policy programmes. This chapter describes the evolution of unemployment insurance schemes in eighteen long-standing welfare states. It dates the emergence of the first laws and traces the expansion of the coverage and replacement levels of benefits during the ‘Golden Age’ to more recent periods marked by economic crisis and retrenchment in the quality of unemployment protection. Four models of unemployment insurance are identified: voluntary state-subsidized, targeted, state corporatist, and comprehensive schemes. These models sum up institutional differences that are important for understanding the cross-national variation in a broad set of outcomes—ranging from individual conditions and behaviours, such as poverty and labour supply, to macroeconomic stabilization. The quality of unemployment insurance contributes to explain, among other things, differences in poverty rates over time and among nations.
From macroeconomic stabilization to the “structural reforms”: the role of the European unemployment insurance