ABSTRACT
This chapter provides an introductory framework for the analysis by drawing attention to various basic conditions and tendencies which seem relevant to an investigation and assessment of unemployment insurance. One characteristic of unemployment in the United Kingdom today is its low general level. The unemployment situation was severe in the period between the two world wars, and then there has been a striking falling-off to relatively low average levels since the Second World War. The problems connected with frictional unemployment are different from those connected with cyclical and seasonal unemployment. Where unemployment may be expected to be short-term and where there are no major obstacles to the effective redeployment of the labour force, a limited scheme of cash income maintenance benefits will suffice. Faced with the problem of mass unemployment, researchers and policy makers increasingly began to realise the significance and the importance of thinking in terms of the circular flow of income within the economy as a whole.
