1. Possibilities of transfers to unemployed people in the UK.  Non means-tested unemployment insurance for those who qualify for it (contributory Job-Seekers Allowance).  Means-tested unemployment compensation (Income- Based Job-Seekers Allowance)  Housing benefits  Child benefits  Special supplements for lone parents. Introduction Conclusions Panel data produces a different view of job loss than inferences from program rules (such as OECD) This means there is a smaller effect on poverty and job loss than Scruggs suggests Whether 20% is enough to produce a perverse labor market The emphasis on full year full time job losers, which is used in program rules, diverts the attention from people who simply have bad jobs. The welfare system in the UK is substantially means tested, therefore, large transfers are given to a small amount of people. Welfare state generosity piques the interest of economists because of perverse incentives. Perverse incentives are when generous incentives are given to people experiencing job loss which consequentially leads to more unemployment due to the over generosity of benefits Sources 1.Scruggs, Lyle and James Allan. 2006. “The Material Consequences of Welfare States: Benefit Generosity and Absolute Poverty in 16 OECD Countries.” Comparative Political Studies. 39(4): 880-904. 2.Scruggs, Lyle and James P. Allan. 2006. “Welfare-state decommodification in 18 OECD countries: a replication and revision” Journal of European Social Policy. 16(1): 55-72. 3.Smith, Michael, and Heather Zhang. 2011. "On the use of indicators of the generosity of unemployment compensation in quantitative cross- national research". International Journal of Comparative Sociology. 52 (5): 413-430. Lyle Scruggs uses program data instead of panel data in order to find the replacement rates of those unemployed. This graph compares the Replacement Rates of Scruggs using program data from OECD versus Smith using panel data from the BHPS Everything depends on how welfare state generosity is measured. Program rules usually do not take into account all the possible benefit transfer methods. Replacement Rates: a percentage of previous income given as a transfer benefit to those unemployed. Scruggs’ replacement rates are significantly lower than those found using panel data. Measuring Effects of Job Loss on Income Rosemarie Sarno, U3, BA Sociology & Prof. Michael Smith, Department of Sociology The table to the left depicts the share of benefits in total income from 1991 to 2008 by unemployment experience, derived from the British Household Panel Survey. Job losers can come from both low income or high income backgrounds, it is more about people who never get decent jobs. Welfare works by giving a small proportion of those unemployed benefits. For those who do get benefits it accounts for a large proportion of their total income. Benefits shared in total income from 1991-2008 by unemployment experience Weeks UnemployedVariableMeanP25P50P75N wksunemp91 0 weeksbenshare910.0600.010.054734 1-13 weeks 0.0900.030.09164 14-52 weeks 0.440.060.270.94423 wksunemp92 0 weeksbenshare920.0600.010.054152 1-13 weeks 0.0700.020.09175 14-52 weeks 0.50.10.441440 wksunemp93 0 weeksbenshare930.0700.020.064230 1-13 weeks 0.0700.030.08150 14-52 weeks 0.470.060.330.99415 wksunemp94 0 weeksbenshare940.0700.020.054236 1-13 weeks 0.100.030.13142 14-52 weeks 0.490.10.450.98432 wksunemp95 0 weeksbenshare950.0700.020.054198 1-13 weeks 0.0800.020.07109 14-52 weeks 0.460.090.340.95322 wksunemp96 0 weeksbenshare960.0700.020.054400 1-13 weeks 0.1100.040.13124 14-52 weeks 0.450.080.320.89335 wksunemp97 0 weeksbenshare970.0600.010.054241 1-13 weeks 0.0900.020.09125 14-52 weeks 0.430.040.360.83272 wksunemp98 0 weeksbenshare980.0600.010.054529 1-13 weeks 0.0700.020.07123 14-52 weeks 0.440.060.370.88207 wksunemp99 0 weeksbenshare990.0600.010.054417 1-13 weeks 0.1600.060.26100 14-52 weeks 0.460.050.350.9193 wksunemp00 0 weeksbenshare000.0600.020.064352 1-13 weeks 0.0600.020.0596 14-52 weeks 0.460.040.430.85172 wksunemp01 0 weeksbenshare010.0600.010.054234 1-13 weeks 0.100.020.13103 14-52 weeks 0.450.030.30.98169 wksunemp02 0 weeksbenshare020.0700.020.064162 1-13 weeks 0.100.010.14102 14-52 weeks 0.390.020.220.85159 wksunemp03 0 weeksbenshare030.0700.020.074123 1-13 weeks 0.1100.020.1381 14-52 weeks 0.420.010.280.91179 wksunemp04 0 weeksbenshare040.0800.020.074050 1-13 weeks 0.0900.020.1179 14-52 weeks 0.430.030.330.93139 wksunemp05 0 weeksbenshare050.0800.020.074007 1-13 weeks 0.0800.010.192 14-52 weeks 0.430.040.320.93152 wksunemp06 0 weeksbenshare060.0800.020.083917 1-13 weeks 0.1100.040.15103 14-52 weeks 0.460.030.380.99176 wksunemp07 0 weeksbenshare070.0800.020.083736 1-13 weeks 0.1800.040.2595 14-52 weeks 0.480.070.310.99144 wksunemp08 0 weeksbenshare080.0900.020.093642 1-13 weeks 0.1200.030.1482 14-52 weeks 0.450.050.330.93137 We can notice that in most years benefits and transfers make up at least 90% of the total income of those unemployed for 14-52 weeks in the 75th percentile, from 1991- 2008; Benefits make up approximately 20% of the total income for those unemployed for 1-13 weeks in the 75th percentile.