Infotech “Red”, “green” period… What the new unemployment rules applied to the last twenty years would look like

“Red”, “green” period… What the new unemployment rules applied to the last twenty years would look like





It is a sort of “social weather forecast” that the government has just invented. For his new unemployment insurance reform, he imagined two scenarios, depending on whether the unemployment rate is above or below 9%.

A “red” period, when the unemployment rate is high. The unemployment insurance rules are then maintained in their current state: the maximum duration of compensation is:

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  • 24 months for unemployed people under 53,
  • 30 months for people aged 53 or 54,
  • 36 months from age 55.

A “green” period when the unemployment rate is more moderate. New job seekers then lose part of their rights: the amount of the allowance does not change, but the maximum duration of the allowance is reduced by 25%. So it goes to:

  • 18 months for those under 53,
  • 22.5 months for unemployed persons aged 53 and 54,
  • 27 months from age 55.

Why this threshold of 9% unemployment for the change of period? The executive believes that this is the average rate observed over the past twenty years (it is the quarterly unemployment rate, measured by the International Labor Office, which is taken into account).

The transition from one period to another is not only governed by the limit of 9% unemployment. Here is how the new device would have worked if it had been applied for the past twenty years:

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unemployment insurance red green

HAS. Unemployment rate at 9%: transition to a red period.

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B. Three consecutive quarters below 9%: return to the green period.

vs. Subprime crisis, sudden rise in unemployment of more than 0.8 points in one quarter (from 7.7% to 8.6%): transition to a red period.

D. Three consecutive quarters below 9%: return to the green period.

E. Health crisis, sudden rise in unemployment of more than 0.8 points in one quarter (from 7.1% to 9%): transition to a red period.

Unemployment insurance: heads, job seekers lose, tails, they don’t win



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