Unemployment Insurance

DEFINITION of 'Unemployment Insurance'

A source of income for workers who have lost their jobs through no fault of their own. Workers who quit or are fired are generally not eligible for unemployment insurance. Workers who are self-employed are also not eligible to receive unemployment insurance and must provide their own rainy-day funds to cover times when no work is available.

BREAKING DOWN 'Unemployment Insurance'

Unemployment is paid to workers by state governments from a fund of unemployment taxes collected from employers. Unemployment insurance often only pays workers about half of what they were earning at their previous job to help encourage them to seek re-employment. The former employee often must continually prove that he or she has been actively searching for a job as a condition of continuing to receive unemployment insurance.



RELATED TERMS
  1. Unemployment Compensation

    Funds paid by the state to unemployed workers who have lost their ...
  2. Continuing Claims

    Continuing claims refers to unemployed workers that qualify for ...
  3. Unemployment Rate

    The percentage of the total labor force that is unemployed but ...
  4. Unemployment Claim

    A request made by an individual to the state government to receive ...
  5. Unemployment

    Unemployment occurs when a person who is actively searching for ...
  6. Structural Unemployment

    A longer-lasting form of unemployment caused by fundamental shifts ...
Related Articles
  1. Professionals

    Unemployment Risks

    Unemployment Risks
  2. Economics

    What Qualifies as Full Employment?

    Full employment is an economic term describing a situation where all available labor resources are being utilized to their highest extent.
  3. Economics

    Understanding Natural Unemployment

    Natural unemployment is often defined as the lowest rate of unemployment an economy will reach.
  4. Economics

    Macroeconomics: Unemployment

    By Stephen Simpson Labor is a driving force in every economy – wages paid for labor fuel consumer spending, and the output of labor is essential for companies. Likewise, unemployed workers ...
  5. Economics

    What "Unemployment" Really Means

    Unemployment occurs when a person who is actively searching for employment is unable to find work. The most frequently cited measure of unemployment is the unemployment rate. This is the number ...
  6. Economics

    How The Unemployment Rate Affects Everybody

    Depending on how it's measured, the unemployment rate is open to interpretation. Learn how to find the real rate.
  7. Economics

    Understanding the Unemployment Rate

    The unemployment rate is the percentage of people in the labor force who are unemployed but seeking a job.
  8. Professionals

    Types of Unemployment

    CFA Level 1 - Types of Unemployment
  9. Personal Finance

    No Paycheck Doesn't Necessarily Mean No Income

    If you lose your job, be sure to apply for unemployment benefits. It's not welfare, but an insurance program that you and your employer have already paid into.
  10. Economics

    Understanding Frictional Unemployment

    Frictional unemployment is one aspect of natural unemployment, which is unemployment caused by things other than an underperforming economy.
RELATED FAQS
  1. Is there a natural rate of cyclical unemployment?

    Learn more about cyclical unemployment and find out about the relationship of cyclical unemployment to the natural unemployment ... Read Answer >>
  2. What is the difference between structural unemployment and cyclical unemployment?

    Learn more about unemployment in an economy, what structural and cyclical unemployment are, and the differences between these ... Read Answer >>
  3. When does cyclical unemployment become structural unemployment?

    Learn about the conditions under which cyclical unemployment becomes structural unemployment. Find out more about the relationship ... Read Answer >>
  4. What's the difference between cyclical unemployment and seasonal unemployment?

    Learn about the key differences between cyclical and seasonal unemployment. Read about distinguishing features of each of ... Read Answer >>
  5. What is the difference between frictional unemployment and structural unemployment?

    Learn about structural unemployment and frictional unemployment, the differences between the two types and their main characteristics. Read Answer >>
  6. Unemployment resulting from changes in the basic composition of the economy ... ...

    The correct answer is a. An example of structural unemployment is the technological revolution. Computers might have eliminated ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center