Is unemployment insurance going on retirement? : thoughts on a private system of unemployment and pension insurance

Abstract

"The study comes to the conclusion that from a technical perspective private unemployment insurance is feasible. Insurance companies have a great many instruments of risk policy at their disposal to solve problems such as stochastically dependent individual risks, inadequate selection of risk, as well as moral hazard. By means of econometric analyses based on the Socioeconomic Panel (SOEP) it can further be shown that the individual burden of risk-equivalent insurance premiums varies strongly according to socio-economic status. Lower levels of society are clearly more heavily burdened. In the first instance, therefore, socio-political reasons speak against organizing unemployment insurance on a private basis. Socio-political considerations in connection with pension insurance lead to a further central conclusion of this study. The econometric assessment of life expectancy-dependent pension insurance premiums reveal - likewise on the basis of the SOEP - that these are determined to a large extent by socio-economic factors. On account of their comparatively lower level of life expectancy, people in socially lower strata of society should only pay relatively low levels of insurance premiums. Current practice in (public and private) pension insurance does not take this circumstance into account. It becomes apparent that the compensatory effect of a common insurance scheme for unemployment and pensions, each entailing risk-equivalent insurance premiums, would be considerable. Hence, social disadvantages that result from risk-equivalent adjusted unemployment insurance premiums could be compensated for if the premiums for pension insurance were likewise organized in a manner that takes risk into account." (Author's abstract, IAB-Doku) ((en))

Cite article

Lutz, R. (2009): Geht die Arbeitslosenversicherung in Rente? Denkanstoß für ein System privater Arbeitslosen- und Rentenversicherung. (IAB-Bibliothek 316), Bielefeld: Bertelsmann, 260 p. DOI:10.3278/300657w