The aim of the unemployment insurance system is to use the potential of people in the labour market in the best possible way, keep them from falling into poverty in case of job loss and motivate their return to the labour market as soon as possible. Several measures have been put in place to help the unemployed to cope by ensuring an income to them during the unemployment period. In Estonia, such measures are unemployment benefits, i.e the unemployment insurance benefit and the unemployment allowance.
The need to improve the system has been acknowledged in Estonia for a long time. The main problem of the Estonian system is insufficient social protection– the rates of the benefits are low and a rather small share of all unemployed receive these benefits. Low coverage rate and short payment period of the benefits may also lead to early exit from the labour market (i.e. early retirement).
With the analysis, different scenarios of how to improve or change the Estonian system will be offered. The study will include an overview of the system, analysis of the shortcomings of the system and comparable analysis of the practices of other countries.