Page 67 - Työpoliittinen aikakauskirja

Työpoliittinen aikakauskirja 1/2017 English Summaries
English summaries
A review of recent changes in unemploy- ment insurance
Tomi Kyyrä, PhD, research professor; Hanna Pesola, PhD, senior researcher; Aarne Rissanen, MPhil (econ), researcher, VATT Institute for Economic Research (all authors)
This article provides an overview of the Finnish unemployment insurance (UI) scheme. We document main changes in eligibil-
ity rules, bene t levels and bene t duration since 2000. These changes have a ected the generos- ity of the UI scheme in opposite directions, partly o setting each other. We also assess how these changes have a ected the overall generosity of the UI scheme over time.
The changes in the employment condition in 2003, 2010 and 2014 have made the UI sys- tem more generous by easing the access to the bene ts. By contrast, all changes in the length of the entitlement period have reduced the ben- e t generosity. These include the abolition of the training subsidy in 2010, the shortening of the entitlement period in 2014 and 2017, and increases in the age threshold for the extended bene ts in 2005, 2012 and 2015. In terms of the bene t levels the UI scheme became gradually more generous until 2012 due to various ben- e t increases, many of which were tied to the length of the working career or participation in labour market training. More recently, the ben- e t levels have declined due to the bene t cuts in 2015 and 2017.
To summarize these changes in a coherent way we compute the maximum amount of UI bene- ts for a reference population of new entrants to unemployment. This exercise suggests that the overall generosity increased between 2002 and 2014, exhibiting discontinuous jumps in 2003 and 2014 due to the loosening of the eli- gibility criteria. These increases were followed by declines in 2015 and 2017 which brought the overall generosity back to the level where it was at the beginning of the 2000s.
The development of the average bene t gen- erosity masks di erent patterns between groups. The generosity of the UI scheme for the oldest workers has decreased during the period as they have been hit hard by the restrictions in the access to extended bene ts and the abolition of the bene t increase based on a long working career. Workers with 3 to 19 years of work his- tory have overall bene ted from the changes. Those with less than three years of work history are back at the same level of the generosity they were entitled to in the early 2000s.
This article is based on OECD report ‘Back to Work: Finland: Improving the Re-employment Prospects of Displaced Workers. Around 5.5% of Finnish workers with at least one year of ten-
Improving the re-employment prospects of displaced workers
Merja Kauhanen,Ph.D., Research coordina- tor, Labour Institute for Economic Research
67