Social Assistance and Minimum Income Benefits: Benefit Levels, Replacement Rates and Policies Across 26 OECD Countries, 1990-2009

Jinxian Wang and Olaf van Vliet (2016) Social assistance and minimum income benefits: Benefit levels, replacement rates and policies across 26 OECD countries, 1990-2009. European Journal of Social Security, Vol. 18, No. 4, pp. 333-355.

34 Pages Posted: 8 Dec 2016

See all articles by Jinxian Wang

Jinxian Wang

Leiden University - Department of Tax Law and Economics

Olaf van Vliet

Leiden University - Leiden Law School; Leiden University - Department of Economics

Date Written: November 30, 2016

Abstract

Until recently, social assistance and minimum income benefits have received relatively little attention in the comparative welfare state literature. Relying on two new indicators, this paper examines the development of minimum income benefits across 26 EU and other OECD countries. The real benefit level, the first indicator, is relatively easy to interpret, but international comparisons require adjustments for exchange rates and purchasing power, which can introduce variation that is not related to underlying policy changes. In the second indicator, the net minimum income replacement rate, this disadvantage is cancelled out by construction. Our analysis shows that real benefit levels increased in most countries, whilst replacement rates declined on average. A subsequent qualitative analysis of the changes in the benefit levels confirms that the increased benefit levels reflect policy changes and that the lower replacement rates do not reflect benefit cuts, but relatively larger wage increases. Such a widening gap between benefit levels and wages is in line with the policy agenda of ‘making work pay’. Finally, by analysing the extent to which changes in quantitative indicators reflect actual policy changes, this paper seeks to make a methodological contribution to the ongoing debate on the ‘dependent variable problem’ in the welfare state literature.

Keywords: social assistance, comparative social policy, welfare state reform, benefit indicators, dependent variable problem

JEL Classification: H53, H55, I31, I38

Suggested Citation

Wang, Jinxian and van Vliet, Olaf, Social Assistance and Minimum Income Benefits: Benefit Levels, Replacement Rates and Policies Across 26 OECD Countries, 1990-2009 (November 30, 2016). Jinxian Wang and Olaf van Vliet (2016) Social assistance and minimum income benefits: Benefit levels, replacement rates and policies across 26 OECD countries, 1990-2009. European Journal of Social Security, Vol. 18, No. 4, pp. 333-355.. Available at SSRN: https://ssrn.com/abstract=2881379

Jinxian Wang

Leiden University - Department of Tax Law and Economics ( email )

Steenschuur 25 PO Box 9520
Leiden, 2300 RA
Netherlands

HOME PAGE: http://www.law.leiden.edu/organisation/taxlawandeconomics/economics/staff/wangj.html

Olaf Van Vliet (Contact Author)

Leiden University - Leiden Law School ( email )

Steenschuur 25 PO Box 9520
Leiden, 2300 RA
Netherlands

HOME PAGE: http://www.law.leiden.edu/organisation/taxlawandeconomics/economics/staff/vliet.html

Leiden University - Department of Economics ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands

HOME PAGE: http://www.law.leiden.edu/organisation/taxlawandeconomics/economics/staff/vliet.html

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