Unemployment compensation in the United States is provided through a federal-state system of unemployment insurance (UI). UI provides temporary partial wage replacement to active job seekers who are involuntarily out of work. For older workers, UI is an important source of income security and a potential influence on work incentives. For example, the transition from full employment to retirement may include other non-career employment and part-time jobs before full retirement. Many issues in UI policy, such as coverage, eligibility, adequacy of benefits, duration of benefits, work incentives, benefit financing, and interaction with other programs, are of concern to older workers. A survey of policy issues suggests that changes, such as initial eligibility, continuing eligibility, wage replacement, and partial benefits, should all be examined to evaluate effects on the likely employment patterns of older workers. Particular attention should be given to UI features affecting the choice of self-employment, part-time work, seasonal work, and agricultural jobs. The financing consequences of possible UI program changes should also be estimated, as should the macroeconomic impact of broadening recipiency. Worsening labor shortage conditions in the United States mean that efforts to retain older workers in the labor force will intensify. The current and potential influence of UI on the income security and labor force participation of older workers should be well understood. (Contains 60 references and 13 tables.) (KC)