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Comparing unemployment insurance and unemployment assistance (Английский)

Markets alone cannot provide adequate protection against the risk of unemployment. Private unemployment insurance (UI) fails because of informational problems: the so-called moral hazard (changes in behavior in the presence of insurance that are impossible or very costly to detect) and adverse selection problems (high-risk workers make insurance unattractive to average- and low-risk workers). Hence the mandate for social policy. But social policy...
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