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Don’t let me down: unemployment insurance in the United States

Francesco Spadafora ()
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Francesco Spadafora: Bank of Italy

No 673, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: The Unemployment Insurance (UI) system in the United States has once again played a decisive lifeline role in effectively mitigating the economic and social impact of the Covid-19 pandemic, which prompted an expansion of UI programmes unprecedented in scope, scale and cost. However, the crisis has exposed afresh some well-known challenges for the programme, perhaps best epitomized by the fact that, on the eve of the pandemic, less than one in three unemployed workers collected UI benefits. The objective of this paper is threefold: first, it provides a comprehensive overview of the main structural characteristics of the UI system; second, it compares the role played by UI programmes in mitigating the impact of both the 2008-09 Great Recession and the 2020 Covid-19 pandemic; and third, it discusses the main reform proposals put forth to address the challenges identified for the UI system. The experience with the UI system provides fundamental lessons that can usefully inform the debate on whether and how to introduce a common unemployment insurance scheme in Europe for macroeconomic stabilization.

Keywords: unemployment; unemployment insurance; job acceptance; Covid-19; CARES Act (search for similar items in EconPapers)
JEL-codes: E24 H7 J64 J65 (search for similar items in EconPapers)
Date: 2022-03
New Economics Papers: this item is included in nep-ban, nep-ias, nep-lab and nep-mac
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