ABSTRACT
This chapter discusses two policies: the reduction of output loss achieved by a reduction of unemployment and the change in output resulting from the incidence of Unemployment Insurance on various behaviour patterns of the work force. The tendency is to keep the Unemployment Insurance scheme as a separate entity, but to bring its working into closer correspondence with the requirements of other labour market measures. Workers who might initially choose to abuse the Unemployment Insurance system and unjustifiably draw unemployment benefit may change their mind as the period of their voluntary idleness lengthens. Since unemployment was rapidly rising in 1966-1967 there is every likelihood that the percentages would have been higher anyway, even in the absence of a benefit increase. The central function of Unemployment Insurance is to redistribute income over time from periods of employment to periods of unemployment and between persons from the employed to the unemployed.
