ABSTRACT
This chapter attempts to answer a question of fundamental importance—Has the British unemployment insurance system justified itself on economic grounds? To justify itself on economic grounds it would seem that a system of State-operated unemployment insurance, the purpose of which is not to be confused with the different social function filled by Employment Exchanges, must accomplish one or more of four ends. Theorists may argue that the British system has introduced factors tending to diminish unemployment. Sir William Beveridge has shown for the British system of unemployment insurance that even if benefits were raised to half of normal wages and the average percentage of unemployment halved, the saving in contributions for the average employer would be less than one half of one per cent of his wages bill. An authority like him is found supporting the movement to dispense with workers’ contributions altogether; the indication is strong that results have not justified the effort expended on this theory.
