Making unemployment insurance optional would expand the choices workers have.

As an employer, I might buy into an optional UI program, and use that as a way to attract good workers who were looking for income security. My competiion across the treet, however, might not, opting instead to pay higher wages. A worker would weigh which pay package he valued most.

It would also enable employees to self-insure if they wish – to save some of each paycheck until they have a few months of living expenses in the bank.

Alternatively, employees could purchase their own private UI policy much the same way they buy fire or auto insurance. There is no reason government has to be the sole provider of such insurance.

A private insurer would charge premiums based on risk – someone with a stable employment history would pay lower premiums than someone who keeps losing his job.

Peter Schiff, The Real Crash