Is American or European Unemployment Insurance More Generous?
With the economy in tatters and the Democrats in control of the presidency and Congress come January, it would seem like the perfect time for an expansion of various social insurance schemes — a New Deal II. But no doubt there are some on the right who think we shouldn’t go too far towards becoming a social democracy, so one way to measure our leftward movement is by comparing our programs with those of Western Europe, where social Darwinism holds less appeal. And a new IZA study provides one such metric. Stphane Pallage of the University of Quebec at Montreal and Lyle Scruggs and Christian Zimmermann of the University of Connecticut compare the generosity of unemployment insurance in Ohio and France. (The researchers picked those two regions because average wages and the percentage of the labor force in manufacturing were similar.) Using data from 2005, they find that after controlling for differences like eligibility criteria and duration of beneļ¬ts, France’s unemployment insurance
