Federal Unemployment Insurance in the United States

10 Pages Posted: 6 Oct 2017

Date Written: May 25, 2017

Abstract

Unemployment insurance in the United States is one of the fiscal risk-sharing mechanisms designed to mitigate the negative consequences of economic shocks. The system is based on complementary federal and state benefits, which behave very differently during normal and crisis periods. Thus, unemployment insurance is principally a state competence during normal periods, while the federal government assumes an active role in crisis periods, smoothing the negative impact of economic crises on household consumption and mitigating the heterogeneous effects across states.

This is an element that distinguishes the United States from the European Monetary Union, which lacks automatic fiscal stabilising tools for the area as a whole; consequently the costs arising from shocks have to be assumed by each country individually, which makes it difficult for the area to function homogeneously.

Suggested Citation

Albrizio, Silvia and Berganza, Juan Carlos and Kataryniuk, Iván, Federal Unemployment Insurance in the United States (May 25, 2017). Banco de Espana Article 12/17. Available at SSRN: https://ssrn.com/abstract=3048320

Silvia Albrizio

Independent

No Address Available

Juan Carlos Berganza (Contact Author)

Banco de España ( email )

Madrid 28014
Spain
+34913388034 (Phone)
+34913386212 (Fax)

Iván Kataryniuk

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

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