The COVID-19 pandemic started to hit Vietnam in January 2020, adversely affecting the local labor market. Employees, especially low-income and gig workers, have suffered a number of profound and long-term economic impacts such as pay cut, reduced hours of work, change in employment and unemployment. In 2021, the unemployment rate in Vietnam has remained high, at 2.42%.

In the wake of above situation, social security in general and unemployment insurance policy in particular have received increasingly close attention. Unemployment insurance has enabled local employees to deal with difficulty with its the following courses of action, namely providing unemployment benefits for them to cover routine expenses, offering health insurance, sharing job opportunities, and providing vocational training so that the workers can return to the labor market soon.

Illustrative image (source: internet)

In fact, the number of jobless people who filed for unemployment insurance has risen constantly. By the end of 2020, 12.29 million residents had obtained unemployment insurance, an increase of nearly 3 million people compared to that of 2015. Amid Covid-19 pandemic, the number of unemployment insurance beneficiaries is increasing, leading to far higher spending. Only in 2020, some VND16 trillion (equivalent to nearly US$700 million) was paid for insurance holders, an increase of 33% compared to that 2019 and over VND482 billion (equivalent to US$21 million) was spent on vocational training for workers. Unemployment insurance has somewhat helped ease the financial pressure on workers amid Covid-19 pandemic.

BOX:

The unemployment insurance fund is managed and used on the principles of consistency, transparency and legal regulations. It is obtained from the contributions of employees, employers and the government. The state subsidy primarily comes from the central budget and profits from legitimate investments using the fund. It is used to cover unemployment benefits, provide vocational training, offer job counseling and sharing, and pay health insurance for insurance beneficiaries.

Unemployment insurance has been performing well to ensure the rights of workers and meeting their needs not only in the context of the COVID-19 epidemic but also under any other circumstances.