Feasibility and Added Value of a European Unemployment Benefit Scheme

February 2015 - January 2017

DG EMPL at the European Commission commissioned a study to a consortium led by CEPS aiming at analysing the feasibility and added value of introducing a European Unemployment Benefits Scheme (EUBS). The project comprised three main tasks:

1. An in-depth examination of how European Unemployment Benefits could be designed, outlining 18 possible options for a EUBS that are designed along the guidelines stipulated by the Commission in the tender specifications. The 18 EUBS forms came in two sorts: the first four are the "equivalent" systems, i.e. unemployment-linked transfer schemes which receive contributions from and pay out to Member States. The other are "genuine" supranational EUBS systems, partially replacing the national systems, receiving contributions from and paying benefits to citizens. In addition to design, the issue of moral hazard was examined in this task.

2. The second task built on the first and sought to study the feasibility of the different EUBS options, both at national and at European level. The national feasibility assessment had two angles (legal and operational feasibility) and was based on contributions from national experts in 28 EU Member States. The national experts’ input formed the basis for a horizontal (synthesis) report on legal and operational barriers facing a EUBS, which in turn fed in to a roadmap. The EU level feasibility assessment mainly dealt with the question of whether a treaty change would be required if a EUBS would be introduced.

3. The third task concerned a statistical modelling of the value added of a EUBS. After the definition of a benchmark against which the added value of a EUBS is evaluated, the task involved the development of macro- and micro-economic model to assess the stabilisation impact and redistributive effects. This exercise was carried out for each of the EU Member States separately, and for the Euro Area and the European Union.

The project resulted in a comprehensive report summarising the results on the potential of a EUBS to serve as a stabilisation mechanism for Europe, in line with the requirements listed in the Five Presidents’ Report.

Client name: 
Centre for European Economic Research (ZEW)
University of Essex, Institute for Social & Economic Research (ISER)
Cambridge Econometrics
KU Leuven
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