The Introduction of an eu Unemployment Reinsurance System: Income Protection and Maintenance of Consumption

Abstract

The paper deals with the suitability of the introduction of unemployment reinsurance in the countries of the European Union (URS EU) in terms of maintaining the level of consumption of the unemployed and promoting economic efficiency. Based on the literature review, the analysis of the us reinsurance system and the analysis of existing unemployment insurance in the EU, a model of the reinsurance system for unemployment in the EU is developed. The model simulation, based on the data of existing EU-20 unemployment insurance systems in the period 2003–2019, is used to determine the amount of reinsurance payments to countries and the level of contributions needed, while employing various ways of defining payment triggers. We have demonstrated that the urs EU would contribute to better income protection by having a direct impact on the income of the unemployed and at the same time acting as an automatic stabilizer of the economy.

Keywords

• recession
• unemployment
• insurance
• reinsurance
• European Union
• model simulation