Employee account
Employee accounts (also known as employment accounts , English Unemployment Insurance Savings Accounts ) are an alternative model to traditional unemployment insurance . Protection against the financial consequences of unemployment is achieved by the fact that employees are required to pay part of their income into an individual account . In the event of unemployment, the unemployed can then withdraw money from their account. Upon reaching retirement age , the account holder can freely dispose of the accumulated capital. Employee accounts are based on the funded system , while classic unemployment insurance is based on the pay-as-you-go system .
advantages
The tax burden for employees subject to compulsory insurance falls, as the entire credit balance on the employee account remains with the employee in any case (as future unemployment benefit or to top up your pension). Employees do not pay an unemployment insurance contribution, which is perceived as a tax, but a monthly payment into their employee account - a kind of compulsory saving . Because unemployed people fall back on their own money in the employee account in the event of unemployment, there is a market-conform incentive for the unemployed to look for a new job. This leads to increased search efforts during and also before the onset of unemployment, which reduces unemployment. Income from secondary employment does not have to be offset against the unemployment benefit from employee accounts. This leads to increased secondary employment and thus also prevents long-term unemployment and the associated psychosocial problems. Older employees have a longer entitlement period and still have a sufficient incentive to take up work. When they reach retirement age, they have additional capital at their disposal, which can be used to top up their pension. Since the money in the employee account is not lost, there are no deadweight effects . The administrative effort is lower. A distinction between indebted and involuntary unemployment is no longer necessary. Regulations (and legal proceedings) on blocking times are no longer necessary.
disadvantage
The disadvantages of the procedure are that people with a very unsteady working life and younger employees have shorter entitlements. For sufficient protection, the contribution rate to employee accounts should be at least around 4% of gross income.
literature
- A. Boss, A. Brown, D. Snower: Employment accounts for Germany. (= Kiel working paper. 1325). Institute for the World Economy, Kiel 2007.
- A. Brown, M. Orszag, D. Snower: Unemployment Accounts and Employment Incentives. (= Kiel working paper. 1274). Institute for the World Economy, Kiel 2006.
- M. Feldstein, D. Altman: Unemployment Insurance Savings Accounts. (= NBER Working Paper. 6860). National Bureau of Economic Research, Cambridge, Mass 1998.
- S. Fölster among others: Assessing Welfare Accounts. Confederation of Swedish Enterprise, Stockholm 2001.
- Förderverein Arbeiterkonto eV: Employee accounts: Protection against the financial consequences of unemployment by means of a funded procedure. Position paper of the Förderverein Arbeiterkonto eV, Stuttgart 2005.
- MJ Orszag, D. Snower: From Unemployment Benefits to Unemployment Accounts. (= Discussion Paper. No. 532). Research Institute for the Future of Work, Bonn 2002.
- F. Valtenini: Unemployment Insurance Savings Accounts: An Overview. (= Etla Discussion Papers. No. 1136). 2008.
- G. Schanz: On the question of unemployment insurance. Bamberg 1895.