Unemployment Insurance and Social Welfare: The Main Channels
Since the great recession one of the most discussed topics has been the unemployment insurance (UI) and its effects on the labor market outcomes. There are two opposed points of view in the assessing of the UI regarding social welfare, namely, the authors who consider UI creates negative net effect in terms of unemployment duration and, on the other hand, the authors who believe in the positive role of this social program, even as an countercyclical component to deal with recession periods. In this article I am going to summarise the main channels through a change in the generosity of UI modifies —both positive and negatively— some labor markets indicators. Continue Reading →