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Tightened entitlement rules for unemployment insurance benefits

Country of implementation
Switzerland
General short description of the innovation
Changes operated at two levels: / - First, the minimum contribution period to be eligible to unemployment insurance is raised from 6 to 12 months (within a two-year period before unemployment) for all the unemployed, except for people exempted from contributions like parents raising their children or graduates. / - Second, the maximum benefit duration is reduced from 520 to 400 daily allowances (i.e. from about 24 to 18 months), except for the unemployed above 55 years old or in receipt of disability benefits / / These changes are part of the 3rd reform of the federal law on unemployment insurance-LACI, 2003.
Target group
Total Population
Policy Field
  • employment
Type of Policy
  • public
Duration of the policy
In force since 2003.
Scope of innovation
  • Scope: structural
  • Budgets: none
  • Number of intended beneficiaries: unknown
  • Spatial coverage: national
General description of (intended) objectives and strategies
The objective was primarily to restrict access to unemployment insurance benefits in order to contain spending on unemployment insurance and maintain employers? and employee?s contributions at 2% of the insured salary. Exceptions to this tightening of entitlement rules were made for categories of unemployed experiencing the greatest difficulties to find a job (older and disabled workers). For them, the maximum benefit duration remained untouched at 520 days (24 months). / / As stated by the federal government, the extension of the contributory period to 12 months had also to be seen in the context of the introduction of the Free Movement of Persons. The objective was then to align the Swiss unemployment insurance scheme to those prevailing in European countries and avoid abusive unemployment insurance receipt. /
Nature of the innovation-short-term perspective
strong: to achieve annual cost savings
Nature of the innovation-long-term perspective
low
Type of ideal-typical strategy for the innovation
  • dualisation
Type of innovation
  • retrenchment or expansion of an existing/earlier policy
New outputs
  • benefit duration (shorter duration for workers with the greatest chances to rapidly find a job (520 to 400 daily allowances). Duration remains unchanged for categories of workers more likely to experience long-term unemployment (older and disabled workers))
  • benefit eligibility (access to unemployment insurance restricted to workers with a strong labour market attachment (with a minimum 12-month contributory period in past 2 years) )
Intended target group
Workers with a weak labour market attachement, and more particularly youth under 30 years old and EU migrants (seasonal workers or arriving with short-term contracts).
Working age population
  • main source of income: social protection (Unemployment benefits)
Actors involved in policy-making/implementation and/or evaluation
  • central state
Intended output
  • benefit duration (shorter duration for workers with the greatest chances to rapidly find a job (520 to 400 daily allowances). Duration remains unchanged for categories of workers more likely to experience long-term unemployment (older and disabled workers) )
  • benefit eligibility (access to unemployment insurance restricted to workers with a strong labour market attachment (with a minimum 12-month contributory period in past 2 years) )
Did the innovation have any outcome related to job quantity?
An expected outcome was the shortening of average benefit duration, but the actual effect of the reform on this point is difficult to evaluate empirically due to structural and economic effects. According to one econometric study (Steiger 2005), however, the reduction in maximum benefit duration did not increase the chances to find a job earlier, but instead led to a higher likelihood to exit unemployment insurance without finding a job.An expected outcome was a reduced unemployment rate, but the actual effect of the reform on this point is difficult to evaluate empirically due to structural and economic effects.
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