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.