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The Origins of Unemployment Insurance in Britain

A Cross-Class Alliance Approach

Abstract

Britain's 1911 National Insurance Act ranks as the world's first compulsory program of unemployment insurance and was a key element of the Liberal government's reforms. Yet by failing to incorporate differences in actor preferences toward insurance, existing theories of social policy origins provide incomplete explanations for its timing and scope. The objective of this article is to improve on accounts of the 1911 unemployment insurance scheme using a cross-class alliance approach. It argues that employers and workers in capital-intensive trades formed an alliance in support of the scheme, whereas their counterparts in relatively labor-intensive trades were unable to strike a similar bargain. Unlike other frameworks, this approach is amenable to explaining why the unemployment scheme was designed as a contributory system that excluded many trades. The study's findings carry implications for social historians, political economists, and sociologists alike.

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