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 unemploymentreinsurance in the countries of the European Union (URS EU) in terms ofmaintaining the level of consumption of the unemployed and promotingeconomic efficiency. Based on the literature review, the analysis of the usreinsurance system and the analysis of existing unemployment insurancein the EU, a model of the reinsurance system for unemployment in the EUis developed. The model simulation, based on the data of existing EU-20unemployment insurance systems in the period 2003–2019, is used to determinethe amount of reinsurance payments to countries and the levelof contributions needed, while employing various ways of defining paymenttriggers. We have demonstrated that the urs EU would contributeto better income protection by having a direct impact on the income of theunemployed and at the same time acting as an automatic stabilizer of theeconomy.