Research Paper Social Situation Observatory Research Notes 1/2011
Income protection and poverty risk for the unemployed in Europe
This paper explores the extent to which tax-benefit systems protect the newly unemployed and their households from large reductions in income and from risk of poverty. Eight countries are considered: Bulgaria, the Czech Republic, Greece, Spain, Latvia, Poland, Slovakia and the United Kingdom. We find that countries with relatively generous earnings related unemployment benefits (Spain, Czech Republic, Bulgaria) and those where the households of the newly unemployed retain high levels of market income (Slovakia) perform relatively well in terms of relative and absolute income protection. However, once entitlement to unemployment insurance is exhausted, and especially if households have no other market income to fall back on, the picture is different. The adequacy and effectiveness of social assistance and other safety net benefits then become critical.