In recent decades, unemployment has become a serious problem in many parts of the world. Macroeconomic crises and increased globalization have put more workers at risk of job loss in Latin America and, more recently, in East Asia as well. In an effort to transform themselves into market economies, former socialist countries have faced the enormous task of efficiently reallocating workers and jobs across sectors and firms, which has led to the emergence of unemployment and poverty of large proportions. Moreover, since the 1970s, Europe has witnessed a reduction in economic growth and an increase in unemployment, with a worrying rise in the share of long-term unemployed.
This section provides information on activities on income support programs for the unemployed by the labor markets team. Key ongoing or proposed work include research on the design and effects of unemployment insurance savings accounts, issues in improving the design and implementation of unemployment insurance systems, issues and options related to introducing and/or reforming various income support programs for the unemployed in developing countries, and the creation of an unemployment benefits simulation model. Related Employment Policy Primer Papers  Unemployment Benefit Systems in Central and Eastern Europe: A Review of the 1990s (219KB PDF)
Social Protection Discussion Paper No. 0310
Milan Vodopivec, Andreas Wörgötter and Dhushyanth Raju
March 2003
The paper reviews unemployment benefit systems in Central and Eastern Europe in the 1990s. It describes them and analyzes their costs by studying replacement rates, the shares of recipients among the unemployed, and a summary measure of benefit generosity. Moreover, it evaluates their distributive effects (via analyzing data from household income and expenditures surveys) and efficiency effects (via literature review). The evidence shows that unemployment benefits were progressive and that – in countries with broad coverage and sizeable share of benefits in household incomes – they also strongly reduced poverty. The paper also summarizes evidence about work disincentives created by unemployment benefits.
Income Support Systems for the Unemployed: Issues and Options (517KB PDF)
Social Protection Discussion Paper No. 0214
Milan Vodopivec and Dhushyanth Raju
May 2002
The purpose of this report is to provide guidelines for developing countries wishing to introduce or improve income support systems for the unemployed. To arrive at such guidelines, the report summarizes the results in the literature on the performance of various income support systems viewed from four aspects: how desirable are their distributive effects; how they affect efficiency; how suitable they are to confront different types of shocks; and how resistant they are to political interference. Based on this evaluation, and taking account of countries' specific circumstances – chief among them being labor market and other institutions, the administrative capacity needed for administering income support programs, the prevalence of private transfers, cultural factors, the types of shocks typically faced, and the size of informal sector – the suitability of individual programs for developing and transition countries is then evaluated.
Unemployment and Unemployment Protection in Three Groups of Countries (149KB PDF)
Social Protection Discussion Paper No. 9911
Wayne Vroman
May 1999
This report examines unemployment protection with emphasis on three groups of countries: 1) OECD, 2) Central-East Europe and Former Soviet Union and 3) East and South Asia. Section I notes the presence of various public social protection programs including pensions, work injury insurance, health insurance and unemployment benefits. Section II describes the measurement of unemployment in these countries and provides details of their unemployment protection programs including unemployment insurance, unemployment assistance and severance pay schemes. Section III explores the costs of providing unemployment protection. Section IV examines alternatives to unemployment insurance and unemployment assistance for addressing the losses of earnings and increases in poverty associated with unemployment.
Optimal Unemployment Insurance: A Guide to the Literature (109KB PDF)
Social Protection Discussion Paper No. 9906
Edi Karni
January 1999
Unemployment insurance has been the subject of numerous theoretical and empirical studies. These studies elucidate the benefits and the cost of unemployment insurance, namely, the improved the allocation of risk bearing and the reduced incentives for work. In the past two decades a branch of the literature has emerged that deals with the optimal design of unemployment insurance. This literature has been influenced by ideas and methods from the field of information economics and theories from the field of labor economics. The result is a collection of models designed to highlight a variety of issues pertaining to the provision of optimal unemployment insurance. This paper reviews these issues, summarizes the relevant literature, assesses its accomplishments, and points out problems that require further study.
Unemployment Benefits (121KB PDF)
Social Protection Discussion Paper No. 9813
Zafiris Tzannatos and Suzanne Roddis
October 1998
This paper summarizes key aspects of unemployment benefit schemes across the world and presents information on their characteristics in a cross-country comparative context. Unemployment benefit schemes can be of insurance type (paid from employer/worker contributions to provide insurance against "the risk of becoming unemployed") or assistance type (means tested paid to the unemployed poor). Their characteristics include coverage, eligibility conditions, source of funds, benefit levels and administration. These characteristics differ not only across economies but also over time in the same country as governments strive to tune unemployment policies to macro and labor conditions. Therefore, the reader should consider the information in this paper as approximately correct at the time of printing and should refer to the indicated sources for greater reliability.
Related Employment Policy Primer Notes Unemployment Insurance: Efficiency Effects and Lessons for Developing Countries (101KB PDF)
Employment Policy Primer Note No. 5, April 2004 Comparing Unemployment Insurance and Unemployment Assistance (101KB PDF)
Employment Policy Primer Note, February 2004
Special Feature: Workshop on Severance Pay Reform: Toward Unemployment Savings and Retirement Accounts
Laxenberg/Vienna, November 7-8, 2003
The purpose of this workshop was threefold: (i) to take stock of recent reforms or reform proposals in the developed and developing world; (ii) to discuss conceptual and analytical work and proposal for a transformation of these benefits; and (iii) to get a better grasp of the magnitude of the problem and potential solutions for client countries. Top |
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