Unemployment insurance for the self-employed: a way forward post-corona

Abstract

"With the COVID-19 crisis as background, the underlying paper elaborates on setting up an unemployment insurance for self-employed. While a comprehensive approach would have clear advantages, it is crucial to adapt the rules of existing insurances for wage earners appropriately addressing the specific needs of self-employed. Therefore, we discuss key rules and conditions with regard to self-employed and derive conclusions on how unemployment insurance for them should be designed. In this, we investigate the key elements of such an insurance. When it comes to financing the unemployment scheme, we discuss how an income related contribution levied on the running income of the self-employed person could be organised. With regard to entitlement, we argue for a detailed conditioning and monitoring of the closing down of the business rather than focusing upon the involuntary character. Before the background of surging short-time work in the COVID-19 crisis, we reason that a short-time work parallel for self-employed is possible to organise in order to handle exceptional events but would have to be designed with sufficient restrictions. In order to avoid false incentives for excessive repeated use of unemployment benefits, we propose a certain experience rating that is less abrupt than existing re-eligibility criteria and thus still provides continuous protection. Regarding labour market availability, we recommend to balance swift labour market integration and productive matching of entrepreneurial persons into self-employment by criteria giving leeway to self-employed activities as far as possible, but over time also guaranteeing an effective labour market integration. For dealing with the combination of multiple jobs and activities, we provide some guiding principles how to organise an unemployment insurance including entitlement and contributions in an integrated manner around activities, based on total work-related income." (Author's abstract, IAB-Doku) ((en))

Cite article

Schoukens, P. & Weber, E. (2020): Unemployment insurance for the self-employed: a way forward post-corona. (IAB-Discussion Paper 32/2020), Nürnberg, 24 p.