More than 70 per cent of workers lack unemployment protection

The recent global economic crisis has served as a stark reminder of why unemployment insurance matters. But the reality is that fewer than half of almost 200 countries monitored by the ILO offer such protection – Published on International Labour Conference ILO, Nov. 14, 2012.

GENEVA (ILO News) – More than 70 per cent of workers worldwide have no statutory access to unemployment insurance or any type of unemployment assistance, the International Labour Organization (ILO) has said. Unemployment insurance schemes exist in 72 countries out of 198 monitored by the ILO, most of them being middle- and high-income countries.  

The proportion of unemployed workers without any such income security is even higher (86 per cent) if one includes those who haven’t paid social security contributions long enough to qualify for unemployment benefits, as many unemployment insurance schemes are based on contributions.

“This means that more than 86 per cent of the almost 40 million people who dropped out of the labour market since 2008 found themselves without a regular income from one day to the other,” says ILO social protection expert Florence Bonnet.

Young people are particularly affected. If they become unemployed after a short period of having entered the labour market, then they might not have paid into social security long enough to qualify for unemployment benefits.

Only 16 countries provide income support for unemployed young people as first-time jobseekers.

Huge regional differences: … //

… Unemployment insurance as crisis manager:

According to Bonnet, it was not only in South Korea that unemployment benefits played a key role during the crisis.

“Countries with unemployment protection and similar schemes, ideally combined with active labour market policies, have been able to react to the crisis quicker and in a more effective way than countries without such automatic stabilizers,” she explains. “Unemployment benefits also made it easier for unemployed workers to look for a job.”

In more developped countries, unemployment protection schemes helped most workers and employers adapt to the sudden drop in demand, while helping to secure incomes and maintain consumption.

Germany and Austria are good examples. They also facilitated economic recovery through a combination of social insurance and social assistance schemes.

More recently, countries such as Thailand and Viet Nam have started to provide such protection for certain groups of workers. While there is far to go in terms of stimulating global demand, the impact for workers concerned has been dramatic.
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(In June 2012, the ILO’s International Labour Conference adopted Recommendation No. 202 concerning national floors of social protection, which calls on all ILO member countries to provide, as one of the basic social security guarantees to all in need, basic income security. The guarantee should reach at least a nationally defined minimum level for persons unable to earn sufficient income, including in particular those not able to find sufficiently paid employment. This may be provided through different means like unemployment insurance or assistance or through employment guarantees or other public employment programmes).

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