This article argues that unemployment benefits are providing a crucial but often overlooked function by reducing the insecurity associated with modern labor markets. Because job insecurity is associated with concerns about future financial security, economic support during unemployment may lessen the negative effects of job insecurity on employed individuals' well-being. Using data from the European Social Survey, this article shows that the generosity of unemployment benefits makes a difference to the subjective well-being of employed individuals, especially those with limited economic resources and an insecure position in the labor market. These results indicate that unemployment benefits may be viewed as a collective resource with important external benefits, i.e., benefits to society over and above those to the unemployed who directly utilize such benefits. (Contains 3 tables, 1 figure, and 9 notes.)