Abstract
AbstractThis article analyses whether the extent of public welfare provision influences the speed at which (quasi-)jobless households get (back) into employment. (Quasi-)joblessness is one of the key criteria defining the risk of poverty and social exclusion in the EU. Moreover, the perceived tension between the main functions of social benefits (protecting households from poverty and incentivising job search) is most acute among these households. Based on EU-SILC data, we examine changes of household work intensity during one year after benefit receipt. We observe that “more-generous” social benefits have a slightly negative impact. This can potentially be due to a disincentive effect of social benefits, but it can also mean that the additional financial leeway is used by job seekers to wait for more adequate job offers or engage in further training. Even though statistically significant, the estimated negative effects are very small.
Highlights
Criticism of “generous” welfare states has, among other issues like fiscal sustainability, pointed at a possible behavioural change of transfer recipients
6,540 households, 14.7 per cent of the sample, increase their work intensity from the first to the second year observed, while 1,281 households or 2.87 per cent decrease it. It seems that social benefits connect in a slightly negative way to increases in work intensity: there is a correlation of ρ = À1.87 per cent for unadjusted amounts, respectively À1.23 per cent for ENI-adjusted amounts of social benefits
We found with a multivariate model that the “generosity” of social benefits is negatively connected to the speed at which households increase their work intensity:jobless households that receive more or higher benefits are slower to return to employment
Summary
Criticism of “generous” welfare states has, among other issues like fiscal sustainability, pointed at a possible behavioural change of transfer recipients. Descriptive analysis shows that there are important differences between the sample countries concerning the mean change in work intensity of (quasi-)jobless households during one year.
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