The Research Of Control Mechanism To Prevent Moral Hazard In Chinese Unemployment Insurance System

As a tool of income redistribution, the ultimate Unemployment Insuranc(eUI)is, after all, to provide income insurance for basic life and re-employment, thus increases individual as well as society's welfare, however, during our country's UI practice, it has caused the work participation rate reduction, unregistered employment severity and the unemployment period extension. Because of incomplete information cause moral hazard which produces the worker's behavior distortion, but the UI policy lacks control mechanism to eliminate moral hazard, and harms the unemployment insurance system to display the function of fair and efficiency. How to evade moral hazard caused by UI, is the question that we must ponder earnestly. After discussing The basic content of UI and the theory of moral hazard, exposing what's the reason for our country's UI policies cause moral hazard, then introducing the economic theory and empirical study of the moral hazard problems in Unemployment Insurance(UI) by Western economists, proposing control mechanism to resolve moral hazard in Chinese Unemployment Insurance. The essay is divided into seven chapters:ChapterⅠis an introduction. Narrates the background of the article and the framework of the article; ChapterⅡdiscusses UI functions and objectives , and it prepares for the successive theory analyzing; ChapterⅢfrom the moral hazard theory, analyses the manifestations and hazards of moral hazard in UI; ChapterⅣlooks back the Chinese UI reform; ChapterⅤanalyses the reason for Chinese UI policy cause moral hazard; ChapterⅥreferences how to design control mechanism to avoid moral hazard arising from UI by Western economists, proposing specific methods to resolve moral hazard in Chinese UI; ChapterⅦpoints out the basic conclusions of the study in the essay.