Using data from the Portuguese quarterly employment surveys, 1992-96, the present chapter examines the effect of unemployment insurance (UI) on escape rates from unemployment. The first concern is to identify the manner in which UI influences the time profile of these broad transitions. To this end, two different measures of UI are used, namely, receipt of benefits and time to benefit exhaustion. The second concern is to incorporate destination state into the analysis. Four such destination states are identified: full-time employment, part-time employment, "discouragement", and inactivity. The goal of the exercise is not merely to obtain to refined estimates of the effect of UI (and the other covariates) on unemployment but also to assist in the design of policy.