Minimum income benefits as a social protection measure
MINIMUM-INCOMEBENEFITS AS A SOCIALPROTECTION MEASUREPublic Hearing on “European minimum income and poverty indicators”European Economic and Social CommitteeBrussels, 28 May 2013Herwig ImmervollOECD, Directorate for Employment, Labour and Social AffairsHerwig.firstname.lastname@example.org
Need for adequate income protection forthe poorest.Especially in countries where the crisis hit hard
Lower income households tended to losemore (or gain less) in recent yearsChanges in disposable income for total population and bottom and top deciles,2007-2010, in % per yearSource: OECD Income Distribution and Poverty Database. See website for note on Isreal (www.oecd.org/social/income-distribution-database.htm).
Unemployment benefits were key contributorto limiting initial income losses …… but with increasing LT unemployment, follow-up assistance benefitscrucial for averting steep increases in poverty and inequalityChange in benefit receipt, OECD average801001201401601802007 2008 2009 2010Unemp insuranceUnemp-to-population ratioUnemp assistanceSocial assistanceDisabilityOld ageSource: Calculations based on OECD (2013, forthcoming) Social Benefits Recipients Database.
Income support for the poorestSimilar objectives,very different approaches
Main objective of means-tested“last-resort benefits” is to alleviate poverty …… but value of benefit packages is well below poverty thresholdsbenefits received by two-parent family with two children in 2011, % of median incomeSource: OECD tax-benefit database. www.oecd.org/els/sociial/workincentives010203040506070Withcash housingassistance Nohousingassistance (↗)
Main objective of means-tested“last-resort benefits” is to alleviate poverty …… but coverage is often very weak„pseudo’ coverage: GMI benefit recipients as % of income-poor householdsaverage 2007-2010, working-age householdsSource: preliminary calculations based on OECD (2013, forthcoming) Social Benefit Recipiency Database and Income Distribution Database.0%20%40%60%80%100%JapanBelgiumEstoniaSpainPortugalHungaryUnitedKingdomPolandDenmarkLuxembourgNetherlandsSwitzerlandCzechRepublicAustriaSlovakRepublicFranceSloveniaSwedenGermanyNorway
Scope and need for minimum-incomebenefits …... Different accessibility and value of “higher-order” benefitsUnemployment benefit coverage, % of LFS unemployedSource: European Labour Force Surveys and Current Population Survey (US). For definitions and limitations, see Immervoll et al. (2004).01020304050607080901001995 2005
Scope and need for minimum-incomebenefits …... Different in-work incomesNet incomes of a minimum-wage earner2011, single individual, % of median household incomeSource: OECD tax-benefit database. See website for notes on Cyprus. www.oecd.org/els/sociial/workincentives-20020406080100120
Strengthening income support for thepoorest: What priorities and challenges?• Strengthen GMI in countries where provision is weak…… while retaining flexibility in countries where it is part of afinely tuned / decentralised element of social protection• Strengthen GMI in the context of structural reforms of broadersocial protection systeme.g., address underlying causes of declining unemployment-benefit coverage• Balance concerns over coverage and benefit levels• Balance „passive‟ and „active‟ support (Active Inclusion agenda)e.g., risks of implementing new minimum-income in context of insufficient capacity foremployment support
Thank email@example.comSome sources and further information• www.oecd.org/els/social• www.oecd.org/els/social/workincentives• www.oecd.org/social/inequality.htm• “Reforming the Benefit System to Make Work Pay”: Options and prioritiesin a Weak Labour Market”, IZA Policy Paper No. 50, Institute for the Study of Labor,Bonn.• “Minimum-Income Benefits in OECD Countries”, in: D. J. Besharov and K. A.Couch (eds.), Counting the Poor. New Thinking About European Poverty Measures and Lessonsfor the United States, Oxford University Press.