Welfare Compensation for Unemployment in the Great Recession

28 Pages Posted: 10 May 2014

See all articles by Mariña Fernández Salgado

Mariña Fernández Salgado

University of Essex

Francesco Figari

ISER - University of Essex

Holly Sutherland

University of Essex - Institute for Social and Economic Research (ISER)

Alberto Tumino

University of Essex

Date Written: May 2014

Abstract

This paper analyzes the extent to which tax‐benefit systems provide an automatic stabilization of income for those who became unemployed at the onset of the Great Recession. The focus of the analysis is on the compensation for earnings lost due to unemployment which is channeled through the welfare systems to this group of people who are clearly vulnerable to the recession's adverse effects. In order to assess the impact of unemployment on household income, counterfactual scenarios are simulated by using EUROMOD, the EU‐wide microsimulation model, integrated with information from the EU‐LFS data. This paper provides evidence on the differing degrees of relative and absolute resilience of the household incomes of the new unemployed. These arise from the variations in the protection offered by the national tax‐benefit systems and from the personal and household circumstances of those most recently at risk of unemployment in the countries considered.

Keywords: European Union, household income, microsimulation, unemployment

JEL Classification: C81, H55, I3

Suggested Citation

Salgado, Mariña Fernández and Figari, Francesco and Sutherland, Holly and Tumino, Alberto, Welfare Compensation for Unemployment in the Great Recession (May 2014). Review of Income and Wealth, Vol. 60, pp. S177-S204, 2014, Available at SSRN: https://ssrn.com/abstract=2435354 or http://dx.doi.org/10.1111/roiw.12035

Mariña Fernández Salgado

University of Essex

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Francesco Figari (Contact Author)

ISER - University of Essex ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Holly Sutherland

University of Essex - Institute for Social and Economic Research (ISER) ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Alberto Tumino

University of Essex

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
337
PlumX Metrics