Unemployment Insurance and Wealth Redistribution


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. Unemployment insurance (UI) provides temporary, partial wage replacement to workers who suffer unexpected job loss, but it tends to exclude workers who have very low wages or hours of work, or who quit for reasons considered "personal" (for example, to accommodate family demands). Professor Lester argues that while redistribution to workers who are poor or who have caregiving obligations 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, other methods such as direct tax and transfer programs and comprehensive family assistance programs are superior ways to transfer wealth to poor workers and to workers with caregiving obligations.

About the Author

Professor of Law, UCLA School of Law

By uclalaw