Willingness of Lebanese workers to pay for unemployment insurance

Abstract

After the emergence of the industrial society and the increased dependency on technology, along with globalization and worldwide economic recessions, labor market is being affected the most. Thus, unemployment is increasing and is becoming a serious problem, leading to poverty increase and economic decline. Innovative ways to reduce unemployment insurance (UI), have a high priority nowadays. UI protects from the risks of unemployment, and provide regular payments for employees who are laid off involuntarily. Hence, this is considered an important solution for the increased poverty, and the increased shutting down of firms. Most countries are adopting such program after experiencing increased joblessness since it showed to be very beneficial for the employee, for the firm and for the economy as a whole. Lebanon has a high unemployment rate especially after the 2006 July war, and the economy is on a decline. So, introducing UI into the Lebanese law shall be considered of great importance since it helps reducing unemployment rate and reviving its economy. However, the question is: are Lebanese workers willing to pay for UI if it is going to be implemented in Lebanon? This study was conducted to access the Lebanese workers' attitude toward UI and their willingness to pay additional taxes to be covered by this insurance program. Data was collected using a survey distributed randomly to 200 Lebanese workers from different economic sectors in Great Beirut and Matn areas. Results showed that every time the unemployment risk increases, the Lebanese workers' willingness to pay for UI increases as well. In addition, this study disclosed that Lebanese workers working in local firms are more willing to pay for UI than Lebanese workers working in multinational firms. Also, findings revealed that there is no association between income ranges and willingness to pay for UI.