'How Wage Insurance Could Ease Economic Inequality'

Robert Shiller:

How Wage Insurance Could Ease Economic Inequality: Wage insurance may not be on your radar, but it should be. It helps people who have lost their jobs and cannot find new ones that pay as well. That assistance can reduce economic inequality while providing incentives for unemployed people to go back to work quickly.

What’s more, wage insurance has bipartisan support, at least in its current limited form. We ought to expand it, both through government and in the private sector. ...

The role of government is important in this case because for social insurance, governments have a significant advantage in putting into place big ideas that are difficult to market. That was true for federal Old-Age, Survivors and Disability Insurance in the Social Security system starting in 1935, which was followed by an explosion of additional private pension, life insurance and disability plans. Government is needed again now.

But ultimately, there should be two insurance systems, a government one that is limited to assisting lower-income workers and a private one that allows everyone — including those with higher incomes — to buy insurance against wage loss. ...