Lessons from the American Federal-state Unemployment Insurance System for a European Unemployment Benefits System

Lessons from the American Federal-state Unemployment Insurance System for a European Unemployment Benefits System

Author: Christopher J. O'Leary

Publisher:

Published: 2016

Total Pages: 0

ISBN-13:

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The federal-state system of unemployment insurance (UI) in the United States was established by the Social Security Act of 1935 during the Great Depression. Under the program, states provide temporary partial wage replacement to involuntarily unemployed workers with significant labor force attachment. The federal government induced states to establish UI programs through two means: (1) a uniform federal tax imposed on employer payrolls, with a 90 percent reduction granted in states operating approved UI programs, and (2) grants to states to administer their programs. The system has evolved into a collection of separate state programs adapted to different regional, economic, and cultural contexts that all satisfy the same broad federally set standards. This paper reviews state practices concerning applicant eligibility, benefit generosity, and benefit financing, with the aim of revealing lessons for a possible European unemployment benefit system (EUBS). We examine areas of federal leadership, explicit federal-state cooperation, and state innovation. While the U.S. system offers some good ideas for setting up an EUBS, there are also lessons in some shortcomings of the U.S. experience. We overview existing UI systems in European countries and review the debate on EUBS within the European Union. We identify areas of risk for individual and institutional moral hazard in a multi-tiered UI system and give examples of monitoring methods and incentives to ameliorate such risks. We suggest approaches for gradual system development, encouraging lower-tier behavior, benefit financing, and responses to regional and system-wide crises.


A European Unemployment Benefit Scheme

A European Unemployment Benefit Scheme

Author: Bertelsmann Stiftung

Publisher: Verlag Bertelsmann Stiftung

Published: 2014-03-01

Total Pages: 175

ISBN-13: 3867936013

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The recent euro crisis and the dramatic increase of unemployment in some euro countries have triggered a renewed interest in a fiscal capacity for the European Union to stabilize the economy of its member states. One of the proposed instruments is a common European unemployment insurance. In this book Sebastian Dullien from the HTW Berlin provides and evaluates a blueprint for such a scheme. Building on lessons from the unemployment insurance in the United States of America, he outlines how a European unemployment benefit scheme could be constructed to provide significant stabilization to national business cycles, yet without strongly extending social protection in Europe. Macroeconomic stabilization effects and payment flows between countries are simulated and options, potential pitfalls and existing concerns discussed.


Lessons from the American Federal-state Unemployment Insurance System for a European Unemployment Benefits System

Lessons from the American Federal-state Unemployment Insurance System for a European Unemployment Benefits System

Author: Christopher J. O'Leary

Publisher:

Published: 2016

Total Pages: 42

ISBN-13:

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The federal-state system of unemployment insurance (UI) in the United States was established by the Social Security Act of 1935 during the Great Depression. Under the program, states provide temporary partial wage replacement to involuntarily unemployed workers with significant labor force attachment. The federal government induced states to establish UI programs through two means: 1) a uniform federal tax imposed on employer payrolls, with a 90 percent reduction granted in states operating approved UI programs, and 2) grants to states to administer their programs. The system has evolved into a collection of separate state programs adapted to different regional, economic, and cultural contexts that all meet the same standards. This paper reviews state practices concerning applicant eligibility, benefit generosity, and benefit financing, with the aim of revealing lessons for a possible European unemployment benefit system (EUBS). We examine areas of federal leadership, explicit federal-state cooperation, and state innovation. While the U.S. system offers some good ideas for setting up an EUBS, there are also lessons in some shortcomings of the U.S. experience. We identify areas of risk for individual and institutional moral hazard in a multi-tiered UI system, and give examples of monitoring methods and incentives to ameliorate such risks. We suggest approaches for gradual system development, encouraging lower-tier behavior, benefit financing, and responses to regional and system-wide crises.


Unemployment Benefits Versus Conditional Negative Income Taxes

Unemployment Benefits Versus Conditional Negative Income Taxes

Author: Mr.Dennis J. Snower

Publisher: International Monetary Fund

Published: 1995-07-01

Total Pages: 22

ISBN-13: 1451848641

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The paper analyzes the wage-employment effects of replacing unemployment benefits by negative income taxes. It first surveys the major equity and efficiency effects of unemployment benefits versus negative income taxes, and summarizes the salient features of many European unemployment benefit systems in this light. Second, it presents a simple theoretical model that focuses on the relative wage-employment effects of unemployment benefits versus negative income taxes. Finally, it provides some empirical groundwork for assessing this relative effect


Unemployment Insurance and Non-Standard Employment

Unemployment Insurance and Non-Standard Employment

Author: Janine Leschke

Publisher: Springer Science & Business Media

Published: 2009-02-19

Total Pages: 256

ISBN-13: 353191197X

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The importance of non-standard employment forms has increased over the last decades. Janine Leschke addresses two important questions in this regard. First, do workers with part-time and temporary contracts face greater risks of becoming unemployed than those with regular contracts? Secondly, how far are they disadvantaged in terms of access to and level of unemployment benefits? The author compares the design of unemployment benefit systems in Denmark, Germany, Spain, and the United Kingdom. After discussing the development and role of non-standard employment in these countries, she examines the relevant features of unemployment insurance systems such as hours and earning thresholds and minimum contribution requirements. Her empirical analysis shows that non-standard workers are more likely to become unemployed or inactive and are disadvantaged in their entitlements to unemployment benefits.


Regulating the Risk of Unemployment

Regulating the Risk of Unemployment

Author: Jochen Clasen

Publisher: Oxford University Press

Published: 2013-10

Total Pages: 427

ISBN-13: 0199676933

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Regulating the Risk of Unemployment offers a systematic comparative analysis of reforms to unemployment protection systems in European countries since the early 1990s. The volume sheds new light on important changes in a core field of welfare state activity.


The Development of Welfare States in Europe and America

The Development of Welfare States in Europe and America

Author: Peter Flora

Publisher: Transaction Publishers

Published: 1981-01-01

Total Pages: 246

ISBN-13: 9780878559206

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This volume seeks to contribute to an interdisciplinary, comparative, and historical study of Western welfare states. It attempts to link their historical dynamics and contemporary problems in an international perspective. Building on collaboration between European-and American-based research groups, the editors have coordinated contributions by economists, political scientists, sociologists, and historians. The developments they analyze cover a time span from the initiation of modern national social policies at the end of the nineteenth century to the present. The experiences of all the presently existing Western European systems except Spain and Portugal are systematically encompassed, with comparisons developed selectively with the experiences of the United States and Canada. The development of the social security systems, of public expenditures!and taxation, of public education and educational opportunities, and of income inequality are described, compared, and analyzed for varying groupings of the Western European and North American nations. This volume addresses itself mainly to two audiences. The first includes all students of policy problems of the welfare states who seek to gain a comparative perspective and historical understanding. A second group may be more interested in the theory and empirical analysis of long-term societal developments. In this context, the growth of the welfare states ranges as a major departure, along with the development of national states and capitalist economies. The welfare state is interpreted as a general phenomenon of modernization, as a product of the increasing differentiation and the growing size of societies on the one hand, and of processes of social and political mobilization on the other. It is an important element of the structural convergence of modern societies -- by its mere weight in all countries -- and at the same time a source of divergence by the variations within its institutional structure.


Development of Welfare States in Europe and America

Development of Welfare States in Europe and America

Author: Peter Flora

Publisher: Routledge

Published: 2017-07-28

Total Pages: 246

ISBN-13: 1351304909

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This volume seeks to contribute to an interdisci-plinary, comparative, and historical study of Western welfare states. It attempts to link their historical dynamics and contemporary problems in an international perspective. Building on collaboration between European-and American-based research groups, the editors have coordinated contributions by economists, political scientists, sociologists, and historians. The developments they analyze cover a time span from the initiation of modern national social policies at the end of the nineteenth century to the present. The experiences of all the presently existing Western European systems except Spain and Por-tugal are systematically encompassed, with com-parisons developed selectively with the experi-ences of the United States and Canada. The devel-opment of the social security systems, of public expenditures!and taxation, of public education and educational opportunities, and of income inequal-ity are described, compared, and analyzed for varying groupings of the Western European and North American nations. This volume addresses itself mainly to two audi-ences. The first includes all students of policy problems of the welfare states who seek to gain a comparative perspective and historical under-standing. A second group may be more interested in the theory and empirical analysis of long-term societal developments. In this context, the growth of the welfare states ranges as a major departure, along with the development of national states and capitalist economies. The welfare state is interpreted as a general phenomenon of modernization, as a product of the increasing differentiation and the growing size of societies on the one hand, and of processes of social and political mobilization on the other. It is an important element of the structural convergence of modern societies by its mere weight in all countries and at the same time a source of divergence by the variations within its institutional structure.


Unemployment Insurance in America: a Model for Europe?

Unemployment Insurance in America: a Model for Europe?

Author: Karolien Lenaerts

Publisher:

Published: 2017

Total Pages: 19

ISBN-13: 9789461386199

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After the crisis, the longstanding debate on a European unemployment benefits scheme (EUBS) was revived as part of a much larger debate on the need for a supranational automatic stabilization function for Europe. The American unemployment insurance (UI) system, given its two-tier structure, has often been regarded as a model for a potential EUBS. Previous research has examined the lessons to be learned from the US UI. This paper builds on this literature but goes one step further as it carefully assesses whether the lessons from the US system could actually be implemented in a European context. Indeed, while there are important parallels between the US and the EU in some areas, significant differences in others may complicate implementation or even render it impossible. In this paper, the aim, therefore, is to identify the aspects of the US system to draw inspiration from--in light of the EU's institutional and political realities--and explain how they inform a potential EUBS. This exercise concentrates on the design and implementation of a potential EUBS. The paper highlights that a two-tier system helps to better attain the goals of unemployment insurance, as demonstrated by the American experience. It also shows the advantages of being pragmatic and taking an incentives-based approach. Other issues, such as solidarity and redistribution, seem more difficulty to tackle in Europe than in the American context and would require further examination. Finally, discretionary measures should be considered with caution.