If workers understand that there is always a risk that they may lose their jobs, especially...

If workers understand that there is always a risk that they may lose their jobs, especially during economic downturns then why are they not insured against this possibility? Discuss.

Expert Solution

Even if workers understand the possiblity of losing their jobs, it is difficult for them to get insured against the possiblity of economic downturns due to multiple reasons:-

1)Lack of an affordable public option for labour

2)Lack of awareness regarding public insurances if labour unions are not strong

3)Lack of private competition for labor insurance leading to high premiums potentially

4)Lack of bargaining power with unions in order to make employers provide inurance against black swan events

Rahul Sunny answered 2 years ago

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