Unemployment Insurance

unemployment insurance, insurance against loss of wages during the time that an able-bodied worker is involuntarily unemployed. The goal of such insurance is to provide a minimal livelihood to unemployed workers until they are once again employed. Compulsory unemployment insurance makes such protection legally obligatory for certain classes of workers under prescribed conditions. Voluntary unemployment insurance is maintained by private organizations sanctioned, encouraged, or subsidized by the state. The first attempts to establish unemployment insurance plans began toward the end of the 19th cent. in Germany, Italy, and Switzerland (see social security). Most Western European states adopted such plans in the early part of the 20th cent.: France, 1905; Great Britain, 1911; the Netherlands, 1916; Italy, 1919; and Germany, 1927. In the United States an unemployment insurance program, along with other welfare programs, was introduced by the Social Security Act of 1935. That act, amended many times, provides for a sliding scale of payroll taxes on industry. For example, employers whose records show that their business experiences little unemployment receive lower rates. The Employment and Training Administration in the U.S. Dept. of Labor is responsible for administering the law. Over the years Congress has extended the program to many workers initially not covered. By 1994 more than 96% of all workers were covered by unemployment insurance. Each state has its own unemployment insurance law and operates its own program.

See D. Nelson, Unemployment Insurance: The American Experience, 1915–1935 (1969); W. Vroman, Unemployment Insurance Trust Fund Adequacy in the 1990s (1990).

The Columbia Encyclopedia, 6th ed. Copyright© 2014, The Columbia University Press.

Selected full-text books and articles on this topic

Controlling Unemployment Insurance Costs: The Employer's Comprehensive Guide to the UIC System
Gabe Donnadieu; Robert A. Schuler.
Quorum Books, 1994
Unemployment Benefits: Should There Be a Compulsory Federal Standard?
Joseph M. Becker.
American Enterprise Institute, 1980
Topics in Unemployment Insurance Financing
Wayne Vroman.
W.E. Upjohn Institute for Employment Research, 1998
The Problem of Abuse in Unemployment Benefits: A Study in Limits
Joseph M. Becker.
Columbia University Press, 1953
Unemployment Insurance: The American Experience, 1915-1935
Daniel Nelson.
University of Wisconsin Press, 1969
Unemployment Compensation throughout the World: A Comparative Analysis
Wayne Vroman; Vera Brusentsev.
W.E. Upjohn Institute for Employment Research, 2005
Unemployment Insurance: Measuring Who Receives It
Wandner, Stephen A.; Stengle, Thomas.
Monthly Labor Review, Vol. 120, No. 7, July 1997
New Ways of Evaluating State Unemployment Insurance
Tannenwald, Robert; O'Leary, Christopher J.; Huang, Wei-Jang.
New England Economic Review, March-April 1999
Trends in Unemployment Insurance Benefits
McCmurrer, Daniel P.; Chasanov, Amy B.
Monthly Labor Review, Vol. 118, No. 9, September 1995
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