Designing and Implementing Unemployment Benefit Systems in Middle and Low Income Countries : Key Choices between Insurance and Savings Accounts

Several middle income countries are considering reforms of severance pay regulations to both increase flexibility for firms and better protect workers. Policy discussions then often revolve around whether to adopt an unemployment insurance (UI) scheme or unemployment individual savings accounts (UISAs). Proponents of the first emphasize its ability to pool risks and introduce an element of solidarity. Critics point to its potentially negative effects on labor supply as individuals can have fewer incentives to seek, take or keep jobs. In this paper, the authors show that UI and UISAs are, in fact, particular cases of a more general design and that the crucial policy choice is in terms of how redistribution - to cover benefits for those who cannot save enough is financed. The authors outline key features of this general design and discuss trade-offs and possible solutions. The authors discusses issues related to implementation and show how recent technological developments around biometric identification can facilitate the monitoring of conditionalities related to participation in job-search and training activities.

Bibliographic Details

Main Authors:	Weber, Michael, Robalino, David A.
Language:	English en_US
Published:	World Bank, Washington, DC 2013-05
Subjects:	ACCOUNTING, ACTIVE LABOR, ACTIVE LABOR MARKET, ACTIVE LABOR MARKET PROGRAMS, BENCHMARKS, BENEFICIARIES, BENEFICIARY, BENEFIT SCHEMES, BORROWING, CASH TRANSFER, CASH TRANSFER PROGRAMS, CASH TRANSFERS, CONDITIONAL CASH, CONTRIBUTION RATE, CRISES, CURRENT EXPENDITURES, DEBT, DECENTRALIZATION, DEFICITS, DRIVERS, ECONOMIC SURVEYS, ELIGIBILITY REQUIREMENTS, EMPLOYABILITY, EMPLOYMENT DURATIONS, EMPLOYMENT GENERATION, EMPLOYMENT INCENTIVES, EMPLOYMENT OFFICE, EMPLOYMENT OFFICES, EMPLOYMENT PROJECT, EMPLOYMENT SERVICE, EMPLOYMENT STATUS, ENTREPRENEURSHIP, EXPECTED VALUE, FINANCIAL MARKETS, FINDING JOBS, GDP, GDP PER CAPITA, GENERAL EQUILIBRIUM, HEALTH INSURANCE, HEALTH PROGRAMS, HIGH UNEMPLOYMENT, HUMAN DEVELOPMENT, INCENTIVES TO SAVE, INCOME, INCOME GROUPS, INCOME SUPPORT, INCOME SUPPORT SYSTEMS, INDIVIDUAL ACCOUNTS, INFORMAL EMPLOYMENT, INFORMAL SECTOR, INNOVATIONS, INSTITUTIONAL CAPACITY, INSURANCE PROGRAM, INSURANCE SCHEMES, INSURANCE SYSTEMS, INTEREST RATES, JOB SEARCH, JOB-SEARCH ASSISTANCE, JOBS, LABOR ECONOMICS, LABOR MARKET, LABOR MARKET INSTITUTIONS, LABOR MARKET OUTCOMES, LABOR MARKET PERFORMANCE, LABOR MARKETS, LABOR POLICIES, LABOR REGULATIONS, LABOR SUPPLY, LABOUR, LABOUR ADMINISTRATION, LABOUR MARKET, MANDATORY CONTRIBUTIONS, MANDATORY SAVINGS, MIDDLE INCOME COUNTRIES, MIDDLE INCOME COUNTRY, MINIMUM WAGE, NATIONAL PENSION, NATURAL DISASTERS, OLDER WORKERS, PAYMENT SYSTEMS, PAYROLL TAX, PENSION, PENSIONS, POLITICAL ECONOMY, POOR, POSITIVE EFFECTS, PRECAUTIONARY SAVINGS, PRESENT VALUE, PREVIOUS SECTION, PRIVATE PENSION, PRIVATE PROVIDERS, PRIVATE SECTOR, PRIVATE SECTOR COMPANIES, PRIVATE SERVICE, PRODUCTIVITY, PROTECTING WORKERS, PROTECTION SYSTEMS, PUBLIC EMPLOYMENT, PUBLIC EMPLOYMENT SERVICE, PUBLIC EMPLOYMENT SERVICES, PUBLIC WORKS, PUBLIC WORKS PROGRAMS, REAL WAGES, REEMPLOYMENT BONUSES, REGRESSION ANALYSIS, RETIREMENT, RISK POOLING, RISK PROFILES, RISK-POOLING, SAFETY, SAFETY NET, SAFETY NET PROGRAMS, SAFETY NETS, SAVINGS ACCOUNTS, SCHOOL FEEDING, SERVICE PROVIDERS, SEVERANCE PAY, SEVERANCE PAY SYSTEMS, SKILLED LABOR, SKILLED WORKERS, SKILLS TRAINING, SOCIAL ASSISTANCE, SOCIAL BENEFITS, SOCIAL COHESION, SOCIAL FUNDS, SOCIAL INSURANCE, SOCIAL INSURANCE PROGRAMS, SOCIAL PROGRAMS, SOCIAL PROTECTION, SOCIAL SAFETY NETS, SOCIAL SECURITY, SOCIAL SERVICE, SOCIAL WELFARE, STABLE JOBS, TARGETING, TAXATION, TEMPORARY EMPLOYMENT, TRAINING PROGRAMS, TRAINING PROVIDERS, TRAINING SERVICES, TRANSITION COUNTRIES, TRANSITION ECONOMIES, UNEMPLOYED, UNEMPLOYMENT, UNEMPLOYMENT ASSISTANCE, UNEMPLOYMENT BENEFIT, UNEMPLOYMENT BENEFIT PROGRAMS, UNEMPLOYMENT BENEFIT SYSTEM, UNEMPLOYMENT BENEFIT SYSTEMS, UNEMPLOYMENT BENEFITS, UNEMPLOYMENT COMPENSATION, UNEMPLOYMENT DURATION, UNEMPLOYMENT INSURANCE, UNEMPLOYMENT INSURANCE PROGRAMS, UNEMPLOYMENT RATE, UNEMPLOYMENT RATES, UNEMPLOYMENT SPELL, UNEMPLOYMENT SPELLS, UNSKILLED WORKERS, VALUE ADDED, VALUE ADDED TAXES, WEALTH, WELFARE SYSTEM, WORKER, WORKERS, WORKFARE, YOUNG WORKERS,
Online Access:	http://documents.worldbank.org/curated/en/2013/05/20171794/designing-implementing-unemployment-benefit-systems-middle-low-income-countries-key-choices-between-insurance-savings-accounts https://hdl.handle.net/10986/20142
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