cess to benefits, and program financing. The next four chapters extend
the discussion of UC program experiences in four broad geographic
groupings: 1) the OECD-20 countries, 2) CEE-FSU countries, 3) East
and South Asia, and 4) South America. Some problems are common to
countries in all regions. These include providing for adequate program
financing, extending coverage to small enterprises, and ensuring that
UC-related labor market distortions are limited in scale.
On the other hand, some problems are much more pronounced in
particular regions. For instance, unusually long benefit duration is a
feature in OECD-20 and CEE-FSU countries, ensuring protection
against inflation is a unique problem facing many countries in South
America, and effective implementation of new UC programs is a challenge facing Asian and CEE-FSU economies. Given these differences,
the next four chapters pay particular attention to the regional aspects
of unemployment protection.
For example, the OECD database on social expenditures explicitly identifies sev-
erance pay in one of its tables. Across the 29 member countries, just 6 reported
expenditures on severance pay for 1998. Only 2 countries reported data for every
year between 1990 and 1998. Information on numbers compensated is even less
common than expenditure data.
Given the relatively long history of UC programs, there is a large literature ac-
counting for their disincentive effects on job search. The adverse effects of sever-
ance pay has received less attention, and data limitations restrict comparative
For example, MacIsaac and Rama (2001) estimate that only about half of those
eligible for severance pay in Peru actually receive a payment.
Other systems that serve terminated workers include early retirement programs,
disability programs, qualification training and retraining, group loan funds, and
support for small business start-ups.
Vroman (2002b) examines UI and UA programs with attention to their compara-
tive costs and labor market disincentives.
Livelihood protection programs in Asia are also a form of SA program.
Programs related to trade and structural change, such as trade adjustment assis-
tance, could be added to the list.
The geographic classification used in Chapter 2 underlies Table 3
Six countries outside the CEE-FSU area added UC programs: Algeria, Argentina,
Korea, Mauritius, Taiwan, and Venezuela, but one (Ghana) discontinued its pro-