where does the money come from for unemployment
Unemployment benefits Unemployment benefits (depending on the jurisdiction also called unemployment insurance or unemployment compensation) are payments made by the state or other authorized bodies to unemployed people. In the United States, benefits are funded by a compulsory governmental insurance system, not taxes on individual citizens. Depending on the jurisdiction and the status of the person, those sums may be small, covering only basic needs, or may compensate the lost time proportionally to the previous earned salary.
Efficiency wage On the labor turnover flavor of the efficiency wage hypothesis, firms also offer wages in excess of market-clearing (e.g. Salop 1979, Schlicht 1978, Stiglitz 1974), due to the high cost of replacing workers (search, recruitment, training costs).[6][7][8][9] If all firms are identical, one possible equilibrium involves all firms paying a common wage rate above the market-clearing level, with involuntary unemployment serving to diminish turnover. These models can easily be adapted to explain dual labor markets: if low-skill, labor-intensive firms have lower turnover costs (as seems likely), there may be a split between a low-wage, low-effort, high-turnover sector and a high-wage, high effort, low-turnover sector. Again, more sophisticated employment contracts may solve the problem.