Comparative review of unemployment and employment insurance experiences in Asia and worldwide Comparative review of unemployment and employment insurance experiences in Comparative review of unemployment and employment insurance experiences in Asia and worldwide John Carter Michel Bédard Céline Peyron Bista Promoting and Building Unemployment Insurance and Employment Services in ASEAN Regional Office for Asia and the Pacific Comparative review of unemployment and employment insurance experiences in Asia and worldwide Comparative review of unemployment and employment insurance experiences in Asia and worldwide John Carter Michel Bédard Céline Peyron Bista Promoting and Building Unemployment Insurance and Employment Services in ASEAN Regional Office for Asia and the Pacific Copyright © International Labour Organization 2013 First published 2013 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. 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Carter, John; Bédard, Michel; Bista, Céline Peyron Comparative review of unemployment and employment insurance experiences in Asia and worldwide / John Carter, Michel Bédard and Céline Peyron Bista ; Promoting and Building Unemployment Insurance and Employment Services in ASEAN, ILO Regional Office for Asia and the Pacific. - Bangkok: ILO, 2013 xi, 94 p. ISBN 9789221275442; 9789221275459 (web pdf); 9789221275541 (CD ROM) ILO Regional Office for Asia and the Pacific; Promoting and Building Unemployment Insurance and Employment Services in ASEAN unemployment benefit / social protection / social security financing Argentina/ / Bahrain / Canada / Chile / China / Denmark / France / Germany / Japan / Korea R / Mongolia / Thailand / USA / Viet Nam 02.10 ILO Cataloguing in Publication Data The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications and electronic products can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland, or ILO Regional Office for Asia and the Pacific, th11 Floor, United Nations Building, Rajdamnern Nok Avenue, Bangkok 10200, Thailand, or by email: [email protected]. Catalogues or lists of new publications are available free of charge from the above address, or by email: [email protected] Visit our website: www.ilo.org/publns or www.ilo.org/asia Printed in Thailand Cover photos : © ILO/Dow A.2011 Abstract The present report presents an overview of unemployment insurance (UI) and employment insurance (EI) schemes in place in 14 countries, as a means of providing partial income replacement to insured workers while they are between jobs, and looking for new employment. The countries chosen for the comparative review cover not only a wide geographic range, but also a range of economic development stages. Two of these countries are located in North America (Canada and the United States), two are in South America (Argentina and Chile), three are in Europe (Denmark, France, and Germany), one is in the Middle East (Bahrain), two are members of the Association of Southeast Asian Nations (ASEAN) (Thailand and Viet Nam), and finally four are located in East Asia (China, Japan, Mongolia and the Republic of Korea). The purpose of the report is to highlight the main features and practices applied in these UI schemes – which three countries have even chosen to rebrand as EI schemes – rather than offering a detailed review of all of their characteristics and parameters. Some form of unemployment benefits are currently being offered in 72 countries across the world. The current selection, as interesting and wide ranging as it is, cannot and does not pretend to be comprehensive. It only seeks to open avenues for considered thought and deliberation on the concepts, rationale and thinking that can be derived from these particular cases. The research was conducted under the project “Promoting and Building Unemployment Insurance and Employment Services in ASEAN”, funded by the Government of Japan. iii Comparative review of unemployment and employment insurance experiences in Asia and worldwide Foreword The 2009 financial and economic crisis and its impact on labour markets contributed to raising awareness of the importance of introducing unemployment protection measures. Unemployment benefits aim, on the one hand, to guarantee at least partial income replacement, enabling the beneficiary to maintain a certain standard of living until returning to work. On the other hand, they support the unemployed in seeking new employment and increasing their employability. A growing number of countries also acknowledge that providing income security to workers allows for a smoothing of domestic consumption in times when external demand contracts because of reduced global economic activities. Finally, countries equipped with measures to protect and support the unemployed will be better prepared to acquire skills required by changing economies. In these circumstances, the standards set by the International Labour Organization (ILO), in the field of social security and unemployment protection in particular, provide relevant guidelines to countries considering reinforcing protection of their unemployed people. With the Association of Southeast Asian Nations (ASEAN) aiming at integration by 2015, the task of reinforcing social security and establishing social protection floors across the region takes on additional significance. Although in South-East Asian countries unemployment rates are relatively low (4.7 per cent as an average of across the region in 2011), vulnerable workers engaged as own-account or contributing family workers still represented 180 million persons in 2011 or 62 per cent of all workers. During an ILO-ASEAN Seminar on unemployment insurance, income security and active labour market policies, held in Ho Chi Minh City, 20 to 22 March 2012, the ASEAN Governments and social partners acknowledged that unemployment benefits, as well as other social protection measures to support the unemployed or working poor, should be an integral component of development efforts to ensure that progress in poverty reduction is not reversed. Among the ASEAN countries, only Thailand, in 2004, and Viet Nam, in 2009, have established an unemployment insurance scheme. Other countries, e.g Malaysia and the Philippines, are exploring modalities for introducing unemployment benefits. The present research offers a comparative review of unemployment/employment insurance experiences in Asia and worldwide that, It is hoped, will be a useful source of information for ASEAN countries that are exploring diverse options to introduce or adjust unemployment benefits. The research is part of the project “Promoting and Building Unemployment Insurance and Employment Services in ASEAN”, funded by the Ministry of Health, Labour and Welfare of Japan. Yoshiteru Uramoto Assistant Director-General Regional Director ILO Regional Office for Asia and the Pacific iv Acknowledgements The authors would like to gratefully acknowledge the immense support of the Government of Japan in providing assistance to developing countries in ASEAN through the ILO/Japan Multi-bilateral Programme. This regional programme, established in 1974, combines the technical expertise of the ILO with financial support from the Ministry of Health, Labour and Welfare of Japan. The ILO/Japan-ASEAN Project, “Promoting and Building Unemployment Insurance and Employment Services in ASEAN” is the focal point of this support in building and strengthening social security schemes and employment services. We wish to express our gratitude to the various experts within the 14 country ministries and departments dealing with UI and EI who provided their assistance in reviewing country profiles and templates. The 14 countries are: Argentina, Bahrain, Canada, Chile, China, Denmark, France, Germany, Japan, Mongolia, the Republic of Korea, Thailand, United States and Viet Nam. Their assistance provided expert advice on technical matters relating to their UI/EI scheme. We are highly indebted to Ms Isssiree Reungpoj