Abstract
Unemployment insurance (UI) is a social insurance programme in which compensation is paid to unemployed workers. Much of the research on UI has focused on the inherent disincentives. For example, higher benefits have been found to increase unemployment durations, with little clear positive impact on the quality of new jobs. Additionally, financing UI through payroll taxes that are not completely experience-rated provides an incentive for firms to lay off workers. Thus, while UI is an important safety net for unemployed workers, it may also increase unemployment overall.
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Anderson, P.M. (2018). Unemployment Insurance. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2844
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2844
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