Papers on Unemployment Insurance for the European Union

In European policy circles there is a growing awareness of the need to equip the European Monetary Union with a pan-European stabilization capacity to help mitigate the impact of economic shocks. Proposals currently under consideration include a European Unemployment Benefit Scheme (EUBS) to support or supplement national UI systems. An EUBS would provide Europe with a true “multi-level” way to manage the policy response to unemployment.

In June, 2016 the W.E. Upjohn Institute organized a session on unemployment insurance for the European Union at the Association for Public Policy Management and Analysis international research conference held at the London School for Economics.  The session examined the rationale and challenges for such a European unemployment benefit system (EUBS).  The four research papers presented at that session are posted below.  The papers emerged from a project initiated by the Center for European Policy Studies (CEPS).  The papers consider the incentive relations for UI programs in multi-tiered administrative and governmental arrangements in both the national and international contexts.  Aspects of benefit generosity and coverage, the impact on inequality, incentives, moral hazard, and financing are addressed where relevant in each paper.

The first paper by Miroslav Beblavý, Gabriele Marconi and Ilaria Maselli at CEPS sets the stage by explaining the context and rationale for a potential EUBS.  The second paper by Robert Strauss of the European Commission summarizes the history of EUBS policy considerations and the practical state of current efforts to promote an EUBS.  The third paper by Frank Vandenbroucke, Chris Luijges, Donna Wood, and Kim Lievens draws on eight case studies of countries with multi-level regulation of unemployment, and describes the overall lessons that can be learned from their experiences, notably with regard to the problem of “institutional moral hazard.”  The fourth paper by Chris O’Leary and Burt Barnow provides the U.S. example of how a multi-level UI system operates and lessons it offers for an EUBS.