Unemployment Insurance and Wealth Redistribution

Abstract

This Article evaluates the merit of liberalizing unemployment insurance eligibility as a means to achieve progressive wealth redistribution-an idea that has recently gained popularity among policymakers and legal scholars. UI provides temporary, partial wage replacement to workers who suffer unexpected job loss, but it tends to exclude workers who have unstable, low-wage jobs (such as temporary workers), or who quit or limit their work hours (e.g., to accommodate family demands). I argue that while redistribution to these workers is a desirable goal, expanding UI is a poor way to do it. First, UI benefits are triggered not by low income potential, but rather by the incidence of job loss (which affects both wealthy and poor workers). Second, a comprehensive and ethical program of support for families with caregiving needs would have design features and goals that diverge sharply from UI. Instead of unemployment insurance, I argue, other methods such as direct tax and transfer programs and comprehensive family assistance programs are superior ways to transfer wealth to poor workers and families with caregiving obligations.