Unemployment Compensation Throughout the World

A Comparative Analysis

Introductory chapter | Table of Contents

Unemployment compensation (UC) programs are a long-established form of social insurance that is now prevalent worldwide. In fact, as we start the twenty-first century some 70 countries have UC programs. These programs vary quite a bit because of country- or region-specific concerns, but they all have the same goals: to provide temporary income support to workers during spells of unemployment and to abate the macroeconomic impact of layoffs on a country’s economy.

Several recent developments have led to institutional changes in the world economy, thereby bringing to light new information on UC programs found across the globe. First, the number of countries with UC increased sharply during the 1990s with the introduction of new programs in Central and Eastern Europe (CEE) and the former Soviet Union (FSU). Next, the East Asian financial crisis saw a dramatic shift from a path of high growth to a sharp decline in economic activity, causing not only economic but social problems. And, third, the structure and administration of UC programs changed in a number of countries, some in innovative ways. Taken together, these recent developments present a unique opportunity to review and assess the challenges currently facing UC programs.

This is what Wayne Vroman and Vera Brusentsev do. They take advantage of this newly available information to produce a book that contains an up-to-date perspective and review of UC programs in numerous countries throughout the world.

The book has four principal objectives: 1) to establish the link between macroeconomic performance in the product market and the in labor market and to argue for the role of unemployment protection; 2) to provide an overview of UC programs throughout the world, including case studies of individual countries in four specific regions that highlight the unique difficulties facing UC programs in each of four regions; 3) to introduce the reader to the issue of actuarial costs of UC programs; and 4) to discuss three important problem areas facing UC—coverage, continuing benefit eligibility, and policies to shorten the duration of unemployment and UC benefit duration.

Vroman and Brusentsev begin by discussing several macroeconomic topics related to UC, including key economic indicators for a sample of 150 countries in eight geographic regions. Next, they survey several types of unemployment protection schemes, including UC. They then focus their efforts on four specific regions of the world: 1) Western European and the English-speaking OECD countries, 2) CEE and FSU countries, 3) Asia, and 4) Latin America and the Caribbean. The problems of unemployment are examined in each of these areas, as well as questions of UC costs and program administration. Region-specific problems are also addressed. Their analysis moves to the three key problem areas facing UC programs and concludes with a summation of the book’s findings, along with recommendations for improving UC programs throughout the world.
273 pp. 2005.
$41 cloth ISBN 0-88099-323-5 / ISBN-13 978-0-88099-323-4
$20 paper ISBN 0-88099-322-7 / ISBN-13 978-0-88099-322-7

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