unemployment insurance

Form of social insurance designed to compensate workers for short-term, involuntary unemployment. It was created primarily to provide financial assistance to laid-off workers during a period deemed long enough to allow them to find another job or to be rehired at their original job. In most countries, workers who are permanently disabled or who have been unemployed for a long period of time are covered under other plans. In countries such as Canada and Britain, workers in any occupation may qualify for unemployment insurance; the U.S. denies coverage to certain workers, such as government employees and the self-employed. In most countries, benefits are related to earnings and are paid for a limited period of time. Funding may come out of general government revenues or from specific taxes placed on employers or employees.

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